No Down Payment Mortgages: Options, Pros and What to Know
Saving for a down payment is one of the biggest hurdles for home buyers. A few loan programs allow little or no money down. This guide explains the main options, who they are for and the trade-offs.
VA loans
Loans backed by the Department of Veterans Affairs are available to eligible veterans, service members and some surviving spouses. They often require no down payment and no monthly mortgage insurance.
USDA loans
USDA Rural Development loans can offer zero-down financing for homes in eligible rural and suburban areas, with income limits that depend on location and household size.
Low down payment loans
FHA loans allow a small down payment with qualifying credit, and some conventional loan programs accept as little as 3 percent down for first-time buyers.
Down payment assistance
State housing agencies, cities and some employers offer grants or forgivable loans that can cover the down payment or closing costs. Rules and funding vary by area.
Trade-offs to consider
Putting less money down usually means a larger loan, more interest over time and, for some loans, mortgage insurance. It also means less equity at the start.
Getting started
Check your credit, compare quotes from several lenders, and ask each one which zero- or low-down programs you may qualify for.