You can buy a house without putting money down, but only through specific loan programs, and each one has trade-offs you need to understand before you commit.

The most common no-down-payment options are VA loans (for military members and veterans), USDA loans (for rural properties), and conventional loans with lender-paid mortgage insurance. Each program has different rules about who qualifies, what property types work, and what you'll pay over the life of the loan. The catch is that skipping a down payment doesn't mean skipping costs — it usually means paying them differently, often through higher monthly payments or upfront fees.

Understanding which programs exist, who runs them, and what they actually cost is the first step. The second is knowing what lenders will and won't do, because availability varies by region and by lender.

Key Takeaways

  • VA loans and USDA loans are the only programs that routinely allow zero down payment with no mortgage insurance requirement, but VA loans require military service and USDA loans require a rural property.
  • Conventional loans can go to zero down, but you'll pay mortgage insurance (PMI) on top of your regular payment, adding $100 to $300+ per month depending on loan size.
  • No-down-payment loans often come with higher interest rates than loans with 10 or 20 percent down, which means you pay more over 30 years even if your monthly payment looks similar.
  • Lenders have stricter income and credit requirements for no-down-payment loans, and not all lenders offer them — you may need to shop multiple banks or mortgage brokers.
  • Down payment information programs exist in some states and cities, but they're separate from these loan types and often have income limits or geographic restrictions.

VA Loans: No Down Payment for Military and Veterans

A VA loan is backed by the U.S. Department of Veterans Affairs and requires no down payment, no mortgage insurance, and no prepayment penalty. You must have served on active duty (or be a surviving spouse of someone who did) and have a Certificate of may be able to access from the VA. The VA doesn't lend the money — a bank or mortgage company does — but the VA guarantees a portion of the loan, which is why lenders will lend without a down payment.

VA loans are available for primary residences only, not investment properties or vacation homes. The property must meet VA minimum standards, which means the house has to be in decent condition. You still pay a funding fee (usually 2 to 3 percent of the loan amount) unless you're exempt due to disability rating. That fee can be rolled into the loan, so you don't pay it upfront, but you do pay interest on it over 30 years.

Interest rates on VA loans are typically lower than conventional loans because the VA may provide reduces the lender's risk. If you have a VA loan and want to sell, the VA entitlement can be restored so you can use it again — or you can pass it to a surviving spouse in some cases. The main limitation is availability: not all lenders offer VA loans, and some regions have fewer options than others.

USDA Loans: No Down Payment for Rural Properties

A USDA loan is backed by the U.S. Department of Agriculture and allows zero down payment for homes in designated rural areas. You must meet income limits (usually 115 percent of the area median income, though this varies by county) and the property must be in an may be able to access rural zone — USDA publishes a map showing which addresses may have access to. The loan is for primary residence only.

Like VA loans, USDA loans don't require mortgage insurance in the traditional sense, but you do pay a may provide fee (about 2 percent upfront, usually rolled into the loan) and an annual fee (about 0.35 percent of the loan balance per year). These fees are lower than PMI on a conventional loan, but they add up over time. Interest rates are competitive with conventional loans, sometimes lower depending on market conditions and your credit profile.

USDA loans are available through approved lenders, and not every lender participates. If you're buying in a rural area, check the USDA website to confirm your address is may be able to access before you spend time with a lender — many rural properties don't may have access to because they're technically in a zone designated as urban or suburban.

Conventional Loans With Zero Down and Mortgage Insurance

A conventional loan (one not backed by the VA or USDA) can go to zero down payment, but you'll pay private mortgage insurance, or PMI. PMI protects the lender if you stop paying; it doesn't protect you. The cost varies but typically runs 0.5 to 1.5 percent of the loan amount per year, paid monthly as part of your mortgage payment.

On a $300,000 loan, PMI might add $125 to $375 per month. You can remove PMI once you've paid down the loan to 80 percent of the home's original value (or 78 percent in some cases), but that takes years. Some lenders offer "lender-paid mortgage insurance" where the lender pays the PMI cost upfront and charges you a higher interest rate instead — this can make sense if you plan to sell or refinance within a few years, but it costs more over 30 years.

Conventional loans with zero down typically require a credit score of 620 or higher (though 640+ is more common), stable income, and a debt-to-income ratio under 50 percent. Interest rates are usually higher than loans with 10 or 20 percent down. Not all lenders offer zero-down conventional loans, and those that do may limit them to borrowers with excellent credit or very low debt.

How No-Down-Payment Loans Actually Cost More

When you skip a down payment, you're not avoiding costs — you're restructuring them. A $300,000 house with 20 percent down ($60,000) means a $240,000 loan. A $300,000 house with zero down means a $300,000 loan. That extra $60,000 sits in your mortgage for 30 years, accruing interest.

On a 30-year loan at 6.5 percent, that extra $60,000 costs roughly $127,000 in total interest. Add PMI ($125 to $375 per month for a conventional loan) and you're paying significantly more than someone who put 20 percent down. VA and USDA loans avoid PMI, but they often come with slightly higher interest rates to compensate for the lender's increased risk.

The real comparison isn't "down payment versus no down payment" — it's "what does this specific loan cost over 30 years, and what are my alternatives?" A VA loan at 6.2 percent with no PMI might cost less overall than a conventional loan at 6.8 percent with PMI, even though the conventional loan has a lower headline rate. Run the numbers with a mortgage calculator or ask lenders for a full amortization schedule.

Down Payment information Programs in Your State or City

Some states and cities offer down payment information grants or low-interest loans that can reduce or eliminate your down payment requirement. These are separate from VA and USDA loans and are usually run by housing finance agencies or nonprofits. Examples include programs in California, New York, Texas, and many mid-sized cities, but availability and rules vary widely.

Most down payment information programs have income limits (often 80 to 120 percent of area median income), require you to take a homebuyer education course, and may restrict the purchase price or property type. Some programs give you the money as a grant (you don't repay it); others structure it as a second mortgage (you do repay it, usually with no interest). A few programs require you to stay in the home for a set period or they convert to a loan.

To find programs in your area, start with your state housing finance agency (search "[your state] housing finance agency") or call 211 and ask for down payment information. Local nonprofits and community development organizations often know about programs that aren't widely advertised. If you're a first-time buyer, you may have more options than someone buying a second home.

What Lenders Look For When You Have No Down Payment

Lenders are more cautious with zero-down loans because you have no equity cushion — if the market drops and you stop paying, the lender loses money when ready. To offset that risk, they typically require higher credit scores (680+ for conventional, 620+ for VA and USDA), lower debt-to-income ratios (under 43 percent for conventional, under 50 percent for VA and USDA), and stable employment history.

Some lenders require a larger cash reserve after closing — proof that you have savings equal to two or three months of mortgage payments. This shows you can handle an emergency without defaulting. Self-employed borrowers face stricter documentation requirements, and recent job changes or gaps in employment can disqualify you or require explanation.

Shopping multiple lenders matters more with zero-down loans because availability and rates vary significantly. A bank that won't touch zero-down conventional loans might have a VA program with competitive rates. A mortgage broker can access lenders you can't reach directly. Getting pre-approved by two or three lenders takes a few hours and can save you thousands in interest over 30 years.

Frequently Asked Questions

Can I use a down payment information program and a VA or USDA loan at the same time?

In most cases, no. VA and USDA loans already come with government backing, and mixing them with additional information programs creates complications for lenders. Some state programs explicitly exclude VA and USDA borrowers. Ask your lender and the information program administrator before assuming you can combine them.

What happens to my interest rate if I put zero down instead of 10 percent?

Interest rates typically increase 0.25 to 0.5 percent for zero-down loans compared to 10-percent-down loans, depending on the lender and your credit score. On a $300,000 loan, that 0.5 percent difference adds roughly $1,500 per year in interest. Over 30 years, it compounds significantly.

Can I remove PMI from a conventional zero-down loan?

Yes, once you've paid the loan down to 80 percent of the home's original purchase price (or 78 percent in some cases), you can request PMI removal. On a $300,000 loan, that means paying down to $240,000, which typically takes 8 to 12 years. Some lenders allow removal earlier if your home has appreciated and you get a new appraisal.

Do I need perfect credit to get a zero-down loan?

No, but you need good credit. VA and USDA loans typically require 620 or higher; conventional loans usually want 640 or higher. Below 620, your options narrow significantly and rates increase. If your credit is below 620, working with a credit counselor to raise it before explore can save you money.

What if I'm self-employed and want a zero-down loan?

Self-employed borrowers can get zero-down loans, but lenders require more documentation: typically two years of tax returns, profit-and-loss statements, and sometimes bank statements. Income must be stable or growing. Some lenders are more flexible with self-employed borrowers than others, so shopping around is especially important.