You can get a mortgage with zero down payment, but only through specific government-backed programs, and the trade-offs are real

No-down-payment mortgages exist, but they are not the norm and they come with costs that offset what you save upfront. The main routes are VA loans (for military veterans and active-duty service members), USDA loans (for rural properties), and FHA loans with 3.5% down (which is not zero, but close). Conventional loans from banks and mortgage companies almost always require at least 3% to 5% down. If you have heard of a true zero-down conventional mortgage, it either does not exist or comes with a catch—usually a much higher interest rate or a requirement to pay mortgage insurance upfront.

The reason lenders avoid zero-down mortgages is straightforward: they have no cushion if you default. A down payment is your skin in the game. When you put nothing down, the lender absorbs all the risk, and they price that risk into your loan. That pricing shows up as higher interest rates, mandatory mortgage insurance, or both.

Key Takeaways

  • VA loans and USDA loans are the only true zero-down options; FHA loans require 3.5% down, which is the lowest conventional alternative.
  • VA loans are available only to military veterans, active-duty service members, and some surviving spouses; USDA loans require the property to be in a rural area and your income to fall below regional limits.
  • All zero-down mortgages carry mortgage insurance or funding fees that add to your monthly payment or closing costs, offsetting the savings from no down payment.
  • Interest rates on zero-down loans are typically higher than rates on loans with 10% or 20% down, because lenders are taking on more risk.
  • Lenders will scrutinize your credit score, debt-to-income ratio, and employment history more closely on a zero-down loan than on one with a substantial down payment.

VA loans: zero down if you have military service

A VA loan is backed by the U.S. Department of Veterans Affairs and requires no down payment, no private mortgage insurance, and no prepaid mortgage insurance premium. You pay a one-time funding fee (usually 2.3% of the loan amount for first-time users, lower for subsequent loans, and waived entirely if you have a service-connected disability rated by the VA). That fee can be rolled into the loan, so you do not pay it upfront in cash.

To use a VA loan, you must have a Certificate of may be able to access from the VA, which you can request online through the VA website or through your lender. You need a minimum credit score (most lenders want 620 or higher, though some go lower), and your debt-to-income ratio typically cannot exceed 41% to 50%, depending on the lender. The property must be your primary residence.

VA loans are available to veterans with an honorable discharge, active-duty service members (after 90 days of service), National Guard and Reserve members (after six years), and surviving spouses of service members who died in service or from a service-connected disability. If you fall into one of these categories, a VA loan is usually the cheapest path to homeownership because you avoid both the down payment and private mortgage insurance.

USDA loans: zero down for rural properties

A USDA loan is backed by the U.S. Department of Agriculture and requires no down payment. It is designed for rural and some suburban properties, not urban ones. The USDA defines may be able to access areas on a county-by-county basis; you can check whether a specific address qualifies on the USDA website.

To use a USDA loan, your household income must fall below a regional limit (which varies by county and family size—typically 115% of the area median income). You must have a credit score of at least 580 (some lenders require 620 or higher). You pay a may provide fee upfront (usually 1% to 3.5% of the loan amount, often rolled into the loan) and an annual mortgage insurance premium (0.35% to 0.55% of the loan balance per year, added to your monthly payment).

USDA loans move slowly because the USDA must verify your income and the property's rural status. The process typically takes 45 to 60 days from process to closing. If you live in or near a rural area and your income qualifies, a USDA loan can be cheaper than an FHA loan because the annual insurance premium is lower.

FHA loans: 3.5% down as the practical zero-down alternative

An FHA loan requires a minimum 3.5% down payment, which is not zero but is the lowest down payment available through a mainstream lender. On a $300,000 home, 3.5% is $10,500. FHA loans are insured by the Federal Housing Administration, which means the government backs the loan if you default.

Because the government insures the loan, lenders can accept lower credit scores (as low as 500 to 580, depending on the lender) and higher debt-to-income ratios (up to 50% or sometimes higher). You pay mortgage insurance upfront (1.75% of the loan amount, usually rolled into the loan) and an annual mortgage insurance premium (0.55% to 0.8% of the loan balance per year, added to your monthly payment). The annual insurance stays on your loan for the life of the loan unless you put down at least 10% initially, in which case it drops off after 11 years.

FHA loans are faster than USDA loans and do not have the income or property-location restrictions that USDA loans do. If you have a credit score below 620 or a debt-to-income ratio above 50%, an FHA loan may be your only option.

What zero-down mortgages cost you in interest and insurance

A zero-down mortgage does not save you money overall—it shifts when you pay. Here is what that looks like in practice.

On a $300,000 home with a 7% interest rate over 30 years, a borrower with 20% down ($60,000) pays roughly $798 per month in principal and interest. A borrower with zero down on a VA loan pays roughly $1,996 per month in principal and interest (because the loan amount is higher), but no mortgage insurance. A borrower with zero down on an FHA loan pays roughly $1,996 per month in principal and interest plus $165 per month in mortgage insurance, for a total of $2,161 per month.

The difference between zero down and 20% down is not just the monthly payment. The zero-down borrower is financing $60,000 more in principal, which means paying interest on that $60,000 for 30 years. Over the life of the loan, that interest compounds. A VA loan avoids the mortgage insurance piece, which is why VA loans are the cheapest zero-down option. An FHA loan stacks both the higher principal and the mortgage insurance, making it the most expensive option of the three.

Interest rates on zero-down loans are also typically 0.25% to 0.5% higher than rates on loans with 10% or 20% down, because lenders see zero-down borrowers as higher risk. That rate difference adds hundreds of dollars per year to your payment.

Credit score and debt-to-income requirements for zero-down loans

Lenders tighten their standards on zero-down loans because they have no down payment to absorb losses. Your credit score matters more, your debt-to-income ratio matters more, and your employment history matters more.

For a VA loan, most lenders want a credit score of 620 or higher, though some will go to 580. Your debt-to-income ratio should be 41% or lower, though some lenders will go to 50%. For a USDA loan, the minimums are similar: 580 to 620 credit score, 41% to 50% debt-to-income ratio. For an FHA loan, lenders are more flexible: credit scores as low as 500 to 580, debt-to-income ratios up to 50% or higher.

If your credit score is below 620 or your debt-to-income ratio is above 50%, an FHA loan is your most likely path. If your credit score is above 680 and your debt-to-income ratio is below 43%, you may have access to all three programs and should compare the interest rates and insurance costs across them.

When a zero-down mortgage makes sense and when it does not

A zero-down mortgage makes sense if you are a veteran with a VA loan, because you avoid both the down payment and mortgage insurance. It also makes sense if you live in a rural area, your income qualifies, and you can wait 45 to 60 days for closing—a USDA loan will be cheaper than an FHA loan over time.

A zero-down mortgage does not make sense if you have the cash for a down payment and a credit score above 700. Putting 10% or 20% down will lower your interest rate enough to offset the cost of the down payment within a few years. You will also avoid mortgage insurance entirely, which saves thousands of dollars over the life of the loan.

A zero-down mortgage also does not make sense if you are stretching to afford the monthly payment. Lenders will approve you for a larger loan with zero down than with 20% down, but that does not mean you can afford it. If your debt-to-income ratio is already at 43% or 45%, adding a mortgage payment will leave you vulnerable to a job loss or an emergency expense.

Frequently Asked Questions

Can I get a conventional mortgage with zero down?

No. Conventional mortgages (those not backed by the VA, USDA, or FHA) require a minimum down payment of 3% to 5%. If a lender offers a conventional zero-down mortgage, it is either a scam or comes with a much higher interest rate and upfront fees that make it more expensive than putting money down.

What if I do not may have access to for a VA or USDA loan?

An FHA loan with 3.5% down is your next option. FHA loans have the most flexible credit and debt-to-income requirements of the three programs. If you cannot meet FHA minimums, you will need to save for a larger down payment or work on improving your credit score before explore.

Can I roll the mortgage insurance or funding fee into the loan?

Yes. VA loans, USDA loans, and FHA loans all allow you to roll the upfront insurance or funding fee into the loan amount. This means you do not pay it in cash at closing, but you do pay interest on it for 30 years, which makes it more expensive over time.

Will my interest rate be higher with zero down?

Usually, yes. Lenders typically charge 0.25% to 0.5% more in interest on zero-down loans than on loans with 10% or 20% down. Over 30 years, that difference adds up to tens of thousands of dollars. The exception is VA loans, where the interest rate is often competitive with conventional loans because the VA may provide reduces the lender's risk.

How long does it take to close on a zero-down mortgage?

VA and FHA loans typically close in 30 to 45 days. USDA loans take longer—45 to 60 days—because the USDA must verify your income and the property's rural status. Conventional loans with a down payment often close faster because there is less paperwork for the lender to review.