The main paths to buying without money down

You can buy a home without a down payment through three real programs: VA loans (for military veterans and active service members), USDA loans (for rural and some suburban areas), and conventional loans with down payment information from nonprofits or your employer. Each has different rules about who qualifies and where you can buy. None of them means "information programs" — you still pay a mortgage, and you may pay higher interest rates or monthly insurance costs than someone who put money down.

The catch is that zero down payment does not mean zero cost upfront. You will pay closing costs (typically 2 to 5 percent of the home price), which cover the lender's fees, title search, appraisal, and insurance. Some programs roll these into your loan or help cover them, but you need to understand what you are actually paying before you sign.

Key Takeaways

  • VA loans and USDA loans are the only programs that truly require zero down payment and zero closing costs from you, but VA loans are only for military-connected borrowers and USDA loans only work in designated rural and suburban areas.
  • Conventional loans with down payment information exist, but they usually require you to meet income limits and work with a specific nonprofit or employer program in your area.
  • Zero down payment often means you pay mortgage insurance (PMI) every month until you build equity, which adds hundreds of dollars yearly to your payment.
  • Your credit score, debt-to-income ratio, and employment history matter more when you have no down payment, because the lender has no cushion if the home loses value.
  • The fastest way to find out what you actually may have access to for is to talk to a mortgage lender who works with all three program types, not just one.

VA loans: zero down if you served

VA loans are backed by the U.S. Department of Veterans Affairs and require no down payment and no mortgage insurance. You pay a one-time funding fee (usually 1.4 to 3.6 percent of the loan amount, depending on your service history), which you can roll into the loan itself so you do not pay it upfront. The interest rate is typically lower than conventional loans because the VA guarantees the lender will be repaid if you default.

You may have access to if you are a current or former member of the military, a National Guard member with at least six years of service, or a surviving spouse of someone who died in service or from a service-connected disability. You will need a Certificate of may be able to access from the VA, which you can request online at VA.gov or through your lender. The process takes a few days to a few weeks.

VA loans work anywhere in the country and have no income limits. The lender will still check your credit and debt-to-income ratio, but the bar is often lower than for conventional loans because the VA may provide reduces the lender's risk. You can use a VA loan more than once in your lifetime, though you can only have one active VA loan at a time.

USDA loans: zero down in rural areas

USDA loans are backed by the U.S. Department of Agriculture and require no down payment. Like VA loans, they have no mortgage insurance requirement, though you do pay a may provide fee (usually 1 to 2 percent of the loan amount) that you can roll into the loan. The interest rate is competitive with or better than conventional loans.

The main restriction is location: the home must be in a rural or designated suburban area. USDA publishes a map showing which counties and towns may have access to — most rural counties may have access to, but many suburbs do not. You can check whether a specific address qualifies on the USDA website before you start house hunting. Income limits vary by county and family size, but they are usually high enough that a household earning up to 115 percent of the area median income qualifies.

You need a credit score of at least 580 to 640 (depending on the lender) and a debt-to-income ratio below 41 percent. The process process is similar to a conventional loan: you work with a mortgage lender who is approved to issue USDA loans, and the USDA reviews your process after the lender submits it. The whole process typically takes 30 to 45 days.

Down payment information programs through nonprofits and employers

Some nonprofits and employers offer down payment information grants or forgivable loans that can cover your down payment and closing costs. These are not government programs — they are funded by individual organizations — so what is available depends entirely on where you live and who your employer is. A grant means you do not repay it; a forgivable loan means you repay it only if you sell the home within a certain number of years (usually 5 to 10).

To find programs in your area, start by asking your employer's human resources department whether they offer homebuying information. If not, contact your city or county housing authority or a local nonprofit that focuses on affordable housing. Many areas have community development corporations that run down payment information programs. You can also search the National Community Reinvestment Coalition's database of programs by zip code.

These programs almost always have income limits and may require you to take a homebuying class first. Some are tied to specific lenders or neighborhoods. The process process varies widely — some take two weeks, others take two months. Because these programs are often underfunded, they may close to new applications when money runs out and reopen later in the year.

What happens to your monthly payment without a down payment

When you put no money down on a conventional loan, your lender requires you to pay private mortgage insurance (PMI) every month. PMI protects the lender if you stop paying; it does not protect you. The cost is typically 0.5 to 1.5 percent of your loan amount per year, divided into monthly payments. On a $300,000 loan, that could be $125 to $375 per month on top of your regular mortgage payment.

You can stop paying PMI once you have paid down the loan to 80 percent of the home's original value (or 20 percent equity). If you bought a $300,000 home with no down payment, you would need to pay down the loan to $240,000 to drop PMI. Depending on your interest rate and payment amount, that could take 8 to 12 years. You can also request PMI removal earlier if your home has increased in value and you get a new appraisal.

VA and USDA loans do not require mortgage insurance, which is one reason they are valuable. Your monthly payment is lower, and you build equity faster because you are not paying insurance every month.

Credit score and debt requirements matter more without a down payment

When you have no down payment, lenders view you as higher risk because you have no financial cushion in the home. If the home's value drops or you face a financial emergency, you could end up owing more than the home is worth. Because of this, lenders are stricter about credit scores and debt levels.

Most lenders want a credit score of at least 620 for a conventional loan with no down payment, though 640 to 680 is more common. VA loans typically accept scores as low as 580, and some VA lenders go lower. USDA loans usually require 580 to 640. If your score is below these ranges, you may not may have access to, or you may be offered a higher interest rate.

Your debt-to-income ratio (the percentage of your monthly income that goes to debt payments) also matters more. Most lenders want this below 43 percent, meaning if you earn $5,000 per month, your total debt payments (mortgage, car loan, credit cards, student loans) should not exceed $2,150. With a down payment, lenders sometimes stretch to 50 percent. Without one, they rarely do.

Steps to move forward

Start by determining which programs you might may have access to for. If you have military service, contact a VA-approved lender and request a Certificate of may be able to access. If you live in a rural or suburban area, check the USDA map to see if your location qualifies, then contact a USDA-approved lender. If neither applies, contact your local housing authority or search for down payment information programs in your area.

Once you know which programs are possible, get pre-approved with a lender. Pre-approval means the lender has reviewed your credit, income, and debt and told you how much you can borrow. This is not a loan offer yet — it is a statement that you meet their basic requirements. Pre-approval usually takes 3 to 5 business days and costs nothing.

After pre-approval, you can start house hunting. Work with a real estate agent who understands zero-down programs, because not all agents are familiar with VA or USDA loans. Once you find a home and make an offer, the lender will order an appraisal and verify your employment and assets. Closing typically happens 30 to 45 days after your offer is accepted.

Frequently Asked Questions

Can I use a VA loan or USDA loan if I have bad credit?

Both programs accept lower credit scores than conventional lenders, but you still need a score in the 580 to 640 range depending on the lender. If your score is below 580, you may not may have access to. If it is between 580 and 620, you have options but fewer lenders will work with you. Paying down existing debt or disputing errors on your credit report can help raise your score before you explore.

What if I do not may have access to for VA or USDA but want zero down?

Look for down payment information programs through your employer, local nonprofits, or your city housing authority. These vary widely by location, so there is no single place to check. Start by calling your city or county housing authority — they maintain a list of local programs and can tell you which ones are currently open.

Do I have to pay closing costs if I use a zero-down program?

VA loans cover closing costs as part of the program — the seller often pays them, or they are rolled into your loan. USDA loans require you to pay some closing costs, though the seller can contribute up to 6 percent of the purchase price. Down payment information programs vary — some cover closing costs, others do not. Always ask before you commit.

Can I get a zero-down loan if I am self-employed?

Yes, but it is harder. Lenders want to see two years of tax returns and business income statements to verify your income is stable. Self-employed borrowers without a down payment face stricter scrutiny because the lender has no equity cushion and wants proof your income is reliable. Working with a lender experienced in self-employed borrowers helps.

What happens if I miss a payment on a zero-down loan?

Missing a payment damages your credit and can start the foreclosure process, just as it would with any mortgage. Because you have no equity in the home, the lender has less incentive to work with you on a payment plan. If you face a hardship, contact your lender when ready — many have programs to pause or reduce payments temporarily.