You can buy a house with no down payment, but only through specific loan programs that shift the risk to the lender
A zero down payment mortgage exists. The lender covers the full purchase price, and you begin building equity when ready instead of saving for years first. But these loans are not available to everyone, they cost more in interest and insurance, and the lender's approval standards are stricter than they would be if you brought money to the table.
The main programs that allow this are VA loans (for military service members and veterans), USDA loans (for rural properties), and some FHA loans with mortgage insurance. Conventional loans with zero down are rare and usually require an exceptional credit score and income. Each program has different rules about property type, location, and what you can borrow.
Key Takeaways
- VA loans and USDA loans both allow zero down payment, but VA loans are limited to may be able to access veterans and USDA loans only work for properties in designated rural areas.
- FHA loans can go as low as 3.5 percent down, not zero, though some lenders offer down payment information programs that can cover that amount.
- Zero down payment loans cost more per month because the lender adds mortgage insurance or a funding fee to protect themselves against default.
- Your credit score, debt-to-income ratio, and income stability matter more when you have no down payment, because the lender has no equity cushion if you stop paying.
VA loans: zero down for may be able to access veterans
A VA loan is may provide by the Department of Veterans Affairs and allows veterans, active duty service members, and some surviving spouses to borrow the full purchase price with no down payment. The VA does not lend the money itself—a private lender (a bank, mortgage company, or credit union) makes the loan, and the VA guarantees a portion of it if you default.
Because the VA backs part of the loan, the lender accepts zero down. You pay a funding fee instead, which is a one-time charge rolled into your loan amount. The funding fee ranges from 1.4 to 3.6 percent of the loan amount, depending on whether you have used a VA loan before and whether you have a down payment (even a small one reduces the fee). You do not pay mortgage insurance on a VA loan, which saves money compared to other zero-down programs.
To use a VA loan, you need a Certificate of may be able to access from the VA, which you can request online through VA.gov or through your lender. The property must be your primary residence, and you must meet the lender's income and credit requirements. VA loans work for single-family homes, condos, townhouses, and new construction, but not investment properties.
USDA loans: zero down in rural and some suburban areas
A USDA loan is backed by the U.S. Department of Agriculture and allows zero down payment for properties in may be able to access rural areas. The USDA defines "rural" broadly—it includes many towns and suburbs outside major cities, not just farmland. You can check whether a specific address qualifies on the USDA's website by entering the property address.
Like a VA loan, a USDA loan is may provide by the government, so the lender accepts zero down. You pay a may provide fee (similar to mortgage insurance) that is rolled into the loan. The may provide fee is 1 percent of the loan amount upfront, plus an annual fee of 0.35 percent of the remaining balance. You must occupy the property as your primary residence and meet income limits that vary by county.
USDA loans are available to borrowers with lower credit scores than conventional loans require, though most lenders still want a score of 580 or higher. The income limits are the main barrier—in many counties, your household income cannot exceed 115 percent of the area median income. A lender can tell you whether you fall within the limit for a specific property.
FHA loans: 3.5 percent down, not zero
An FHA loan allows a down payment as low as 3.5 percent, which is the closest option if you do not may have access to for VA or USDA. You still need to come up with that 3.5 percent yourself, though some down payment information programs can cover it. FHA loans are insured by the Federal Housing Administration, meaning the government guarantees the lender will be paid if you default.
Because FHA insures the loan, you pay mortgage insurance premiums (MIP). An upfront MIP of 1.75 percent is added to your loan amount, and an annual MIP is charged every month. The annual MIP ranges from 0.55 to 0.8 percent of the loan balance per year, depending on your down payment and loan term. If you put down less than 10 percent, you pay MIP for the life of the loan, not just until you reach 20 percent equity.
FHA loans have looser credit requirements than conventional loans—many lenders accept scores as low as 580—and they allow higher debt-to-income ratios. The property must be your primary residence, and there are limits on the loan amount that vary by county.
Down payment information programs that can cover zero-down loans
Some nonprofits, state housing agencies, and local governments offer down payment information grants or low-interest loans that can cover your down payment entirely. These programs are separate from the mortgage itself—you get the information money, use it for the down payment, and then take out your mortgage. A few programs specifically target zero-down scenarios by covering the down payment on an FHA loan.
information programs vary widely by location and income level. Some are limited to first-time buyers, some to specific professions (teachers, nurses, police officers), and some to borrowers below a certain income threshold. You can search for programs in your area through the National Foundation for Credit Counseling or by contacting your local housing authority or community development office.
Be aware that some information programs require you to stay in the home for a set period (often 5 to 7 years) or to repay the information if you sell early. Read the terms carefully before accepting the money.
What zero-down loans cost you each month
A zero-down mortgage costs more per month than one with a down payment because the lender adds insurance or fees to protect themselves. On a $300,000 home, the difference between zero down and 20 percent down can be $200 to $400 per month, depending on the loan type and your credit score.
A VA loan has no mortgage insurance, so the cost difference is mainly the funding fee rolled into the balance. A USDA loan adds a may provide fee and annual insurance. An FHA loan adds both an upfront and annual mortgage insurance premium. Over time, these costs add up—a $300,000 FHA loan with 3.5 percent down costs roughly $15,000 to $20,000 more in total interest and insurance than the same loan with 20 percent down.
Your credit score also affects the rate you are offered. Lenders charge higher interest rates to borrowers with lower credit scores, and zero-down borrowers are already seen as higher risk. If your score is below 640, the rate difference alone can add $100 to $200 per month.
Credit score and income requirements for zero-down loans
Zero-down loans require stronger credit and income documentation than down-payment loans because the lender has no equity cushion. A VA loan typically requires a credit score of 620 or higher, though some lenders go lower. A USDA loan usually requires 580 or higher. An FHA loan can go as low as 580, but rates are better above 640.
Income matters more too. Lenders calculate your debt-to-income ratio—your total monthly debt payments divided by your gross monthly income. With a down payment, many lenders accept ratios up to 43 percent. With zero down, the limit is often 40 to 41 percent, and some lenders are stricter. You also need to show stable income for the past two years, and recent job changes can slow approval.
Lenders also look at your savings and assets. Even though you are not putting money down, having some savings in the bank signals you can handle an emergency without defaulting. If you have no savings at all, some lenders will decline you or require a co-signer.
Frequently Asked Questions
Can I get a conventional loan with zero down?
Conventional loans almost never allow zero down. Most require at least 3 to 5 percent down, and rates are better at 10 to 20 percent. If you have an exceptional credit score (750+) and strong income, a few lenders offer 3 percent conventional loans, but zero is not standard in the conventional market.
What happens if I cannot afford the monthly payment on a zero-down loan?
Missing payments damages your credit and can lead to foreclosure. Because you have no equity in the home, you owe more than it is worth if the market drops, making it harder to sell your way out of trouble. Zero-down loans require careful budgeting—make sure the payment fits comfortably in your monthly expenses before you commit.
Can I use a zero-down loan to buy an investment property?
No. VA loans, USDA loans, and FHA loans all require the property to be your primary residence. Investment properties require a down payment, usually 15 to 25 percent, and have higher interest rates.
Do I need a co-signer for a zero-down loan?
Not always, but a co-signer with good credit and income can help you get approved if your credit is weak or your debt-to-income ratio is high. The co-signer is legally responsible for the loan if you do not pay, so choose carefully.
How long does it take to get approved for a zero-down loan?
Approval typically takes 30 to 45 days from process to closing. Zero-down loans require more documentation (proof of income, assets, and sometimes a VA Certificate of may be able to access), so the process can take longer if you are disorganized with paperwork. Start gathering documents early.