Yes, you can buy a house with no money down — but it's not available to everyone, and it comes with trade-offs you need to understand before you apply. This guide covers every zero-down option; when you're ready for the full home buying process, see our complete step-by-step guide to buying a house. For the full requirements checklist beyond just the down payment, see: What Do You Need to Buy a House?
There are two federal zero-down loan programs: VA loans (for veterans and active military) and USDA loans (for rural areas). Beyond those, down payment assistance programs across all 50 states can help eligible buyers cover most or all of their down payment.
Here's a complete breakdown of every legitimate path to buying with little or no money down.
The Two True Zero-Down Mortgage Programs
VA Loans (Veterans and Active Military)
A VA loan is the strongest no-money-down option available. Backed by the Department of Veterans Affairs, it offers:
- 0% down payment — no minimum required
- No private mortgage insurance (PMI) — saves $100–$300+/month compared to FHA or conventional
- Competitive interest rates — often lower than conventional
- No loan limit for borrowers with full entitlement (as of 2020)
Who qualifies:
- Active duty service members (90+ days of service, or 181+ days during peacetime)
- Veterans who meet service requirements
- Surviving spouses of veterans who died in service or from a service-related disability
- Some National Guard and Reserve members (6+ years of service)
What you'll still pay:
- A VA funding fee (typically 1.25%–3.3% of the loan amount, depending on down payment and whether it's your first VA loan) — this can be rolled into the loan
- Closing costs (2%–5% of loan amount) — some can be negotiated with the seller
- VA appraisal fee (typically $500–$800)
Minimum credit score: No official VA minimum. Most lenders set their own floor at 580–620. For the full credit score picture by loan type, see: What Credit Score Do You Need to Buy a House?
USDA Loans (Rural and Suburban Areas)
The USDA Rural Development loan program is available to buyers in eligible rural and some suburban areas. Benefits include:
- 0% down payment
- Lower mortgage insurance than FHA (0.35% annual guarantee fee vs. 0.55% for FHA)
- Fixed 30-year terms
Who qualifies:
- Buyers in USDA-eligible geographic areas (check eligibility at usda.gov)
- Income limits: generally, your household income must be at or below 115% of the area median income (AMI)
What you'll still pay:
- Upfront guarantee fee: 1% of the loan amount (can be rolled into the loan)
- Annual fee: 0.35% of remaining loan balance
- Closing costs (though sellers can contribute up to 6%)
Minimum credit score: No official minimum, but most USDA lenders require 640+.
Down Payment Assistance Programs (DPA)
If you don't qualify for VA or USDA, down payment assistance programs are the next best option. These programs — offered through state housing finance agencies, local governments, and some nonprofits — provide grants or low-interest second loans to cover your down payment.
Types of DPA:
| Type | How It Works |
|---|---|
| Grant | Free money — doesn't need to be repaid |
| Forgivable loan | Repaid only if you sell or refinance within a set period (often 5–10 years) |
| Deferred loan | Repaid when you sell, refinance, or pay off the home |
| Second mortgage | A low-interest second loan on top of your primary mortgage |
How much can DPA cover?
Amounts vary widely. Some programs cover 3%–5% of the purchase price. Others cover the full down payment. A few cover closing costs too.
Who qualifies?
Requirements vary by program, but common eligibility criteria include:
- First-time homebuyer (or not having owned a home in the past 3 years)
- Income at or below area limits (typically 80%–120% of AMI)
- Minimum credit score (often 620–640)
- Primary residence purchase only
- Completion of a homebuyer education course
How to find programs in your state:
Search the HUD-approved housing counselor database at hud.gov, or check your state housing finance agency website. Your mortgage lender may also be aware of local programs you qualify for.
Low-Down-Payment Options (Not Zero, but Close)
If you don't qualify for the above programs, these options require only 3%–3.5% down:
| Loan Type | Minimum Down | Notes |
|---|---|---|
| FHA loan | 3.5% (580+ score) or 10% (500–579) | Mortgage insurance required |
| Conventional 97 (Fannie Mae) | 3% | 620+ score, PMI required |
| Freddie Mac Home Possible | 3% | Income limits apply |
| Freddie Mac HomeOne | 3% | First-time buyers only |
On a $350,000 home, 3% down = $10,500. Combined with a DPA grant, many buyers reach zero out-of-pocket.
The "No Money Down" Fine Print: What You'll Still Need to Pay
No money down does not mean no money. Here's what zero-down buyers still need to cover:
- Closing costs: 2%–5% of the loan amount. On a $300,000 loan, that's $6,000–$15,000. Some programs help cover these; sellers can also contribute (ask your agent to negotiate seller concessions).
- Earnest money deposit: Typically 1%–2% of the purchase price, held in escrow. This goes toward your closing costs at settlement.
- Home inspection: $300–$600 out of pocket.
- Moving costs: $1,000–$5,000.
- Immediate repairs or purchases: Budget for this separately.
The real ask: Even for zero-down buyers, having $5,000–$10,000 in savings reduces stress and gives you a buffer for unexpected costs.
What You Give Up with No Money Down
Zero down isn't always the right choice even if you qualify. Here's what to weigh:
Higher monthly payment: On a $350,000 home at 6.5% with no down payment, you're paying principal and interest on the full $350,000. A 5% down payment ($17,500) drops your loan to $332,500 — saving about $100/month on PI alone.
Mortgage insurance (for non-VA loans): FHA loans require mortgage insurance for the life of the loan unless you refinance. Conventional loans with less than 20% down require PMI, which cancels when you reach 20% equity. For a full breakdown of how mortgage insurance works and what it costs, see: What Is Mortgage Insurance (PMI)?
Less equity cushion: If values dip and you need to sell, you could owe more than the home is worth (be "underwater") with no down payment.
VA and USDA avoid these drawbacks better than FHA — VA has no PMI and competitive rates; USDA has lower insurance costs.
Mortgage Options: VA vs. USDA vs. FHA vs. Conventional
For a full breakdown of how VA, USDA, FHA, and conventional loans compare — including credit score requirements, insurance costs, and loan limits — read our guide: Types of Mortgage Loans.
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