Yes, but only through specific government-backed programs

You can get a mortgage with zero down payment, but not from every lender and not on every property. The main routes are VA loans (for military veterans and active service members), USDA loans (for rural properties), and FHA loans with a 3.5% down payment minimum — which is not zero, but close enough that some people count it. Conventional mortgages from banks and most private lenders require at least 3% to 5% down, and many require more.

The catch is that zero-down programs come with trade-offs. You will pay mortgage insurance (a monthly fee protecting the lender if you stop paying), you may face higher interest rates, and your debt-to-income ratio has to be lower than it would with a larger down payment. The lender is taking on more risk, so they price that risk into the loan.

Key Takeaways

  • VA loans and USDA loans are the only true zero-down mortgages; FHA loans require 3.5% down but are the next-easiest option.
  • You will pay mortgage insurance on zero-down loans, adding $100 to $300+ per month to your payment depending on the loan type and your credit score.
  • Your debt-to-income ratio (all monthly debts divided by gross income) must usually be 43% or lower, and sometimes lower for zero-down loans.
  • VA loans have no mortgage insurance requirement, making them the cheapest zero-down option if you are may be able to access.
  • USDA loans require the property to be in a designated rural area, which excludes most suburbs and all cities.

VA loans: zero down, no mortgage insurance

If you served in the military, a VA loan is the strongest zero-down option. The Department of Veterans Affairs guarantees part of the loan to the lender, which means you do not pay mortgage insurance and you typically get a lower interest rate than you would on an FHA or conventional loan. You also do not need a down payment.

To use a VA loan, you need a Certificate of may be able to access, which you request from the VA. The process takes a few days to a few weeks online through VA.gov. You will need your discharge papers (DD Form 214) or your current military ID. Once you have the certificate, any lender that offers VA loans can process your process. Most major banks and mortgage companies do.

The main limit is the VA funding fee, a one-time charge (usually 1.5% to 3.6% of the loan amount) that gets rolled into your mortgage. This is not the same as mortgage insurance — it is a one-time cost. If you are a surviving spouse of a service member or have a service-connected disability rated at 0% or higher, you may not owe the funding fee at all.

USDA loans: zero down for rural properties

The USDA Rural Development loan program offers zero-down mortgages for properties in designated rural areas. The USDA defines "rural" broadly — it includes many towns and small cities, but excludes suburbs of major metropolitan areas and all large cities. You can check whether a specific address qualifies on the USDA's website by entering the property address.

Like VA loans, USDA loans do not require a down payment. You will pay a mortgage insurance premium (called a may provide fee), which is typically 1% of the loan amount upfront and then 0.35% annually. This is cheaper than FHA mortgage insurance but more expensive than VA loans.

USDA loans have income limits that vary by county. In most rural counties, the limit is around 115% of the area median income, though some counties allow higher incomes. You can check your county's limit on the USDA website. There is no credit score minimum stated in the program rules, but lenders typically require a score of 580 or higher.

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

An FHA loan requires a minimum 3.5% down payment, which is not zero but is low enough that many first-time buyers treat it as the entry point. On a $300,000 home, 3.5% is $10,500. FHA loans are available from most lenders and have no geographic or service-based restrictions — anyone can use them.

The trade-off is mortgage insurance. FHA loans require both an upfront mortgage insurance premium (1.75% of the loan amount, usually rolled into the mortgage) and an annual premium (0.55% to 0.8% of the loan amount per year, depending on your down payment and loan term). On a $300,000 loan, that annual premium is roughly $1,650 to $2,400 per year, or $137 to $200 per month.

FHA loans have a debt-to-income limit of 43% for most borrowers, though some lenders will go to 50% if you have strong compensating factors (like a large savings account or a history of on-time payments). Your credit score needs to be at least 580 to may have access to, though scores of 620 or higher get better rates.

How mortgage insurance works and what it costs

Mortgage insurance protects the lender, not you. If you stop paying, the insurance covers part of the lender's loss. On FHA loans, you pay for this insurance whether you ever default or not. On conventional loans with less than 20% down, you also pay mortgage insurance, but you can request to have it removed once you build enough equity.

The cost varies by loan type and your credit score. On an FHA loan with 3.5% down and a 680 credit score, mortgage insurance might add $150 to $250 per month to your payment. On a USDA loan, it is typically $100 to $150 per month. On a VA loan, there is no mortgage insurance at all — one reason VA loans are so valuable for may be able to access borrowers.

Some lenders offer "lender-paid mortgage insurance," where the lender pays the insurance premium 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 over a 30-year loan, you usually pay more in total interest.

Debt-to-income ratio: the real barrier for zero-down loans

Even with zero down, lenders will not approve you if your monthly debts are too high relative to your income. This is called your debt-to-income ratio (DTI). Most lenders cap it at 43% for zero-down loans, meaning your total monthly debt payments (mortgage, car loans, credit cards, student loans, child support) cannot exceed 43% of your gross monthly income.

On a $60,000 annual salary ($5,000 gross per month), a 43% DTI means your total monthly debts can be no more than $2,150. If you already have a $400 car payment and $200 in student loans, you have $1,550 left for a mortgage payment. On a zero-down FHA loan at current rates, that might support a home price of $200,000 to $220,000, depending on property taxes and insurance in your area.

This is why zero-down loans are hardest for people with existing debt. If you have high credit card balances or car loans, paying those down before you explore for a mortgage will increase the home price you can afford. Some lenders will go to 50% DTI if you have strong credit and savings, but this is not common.

What lenders actually look for beyond zero down

Lenders underwriting zero-down loans scrutinize your credit history and savings more closely than they do for borrowers with a larger down payment. They want to see that you have managed debt responsibly and that you have some financial cushion. A credit score of 620 or higher is standard, though 640+ gets you better rates.

Most lenders also want to see that you have savings equal to at least two months of your new mortgage payment. This is called "reserves." If your mortgage payment will be $1,500, the lender wants to see $3,000 in the bank after closing. Some lenders are flexible on this if you have a co-signer or a strong income history, but it is a common requirement.

Your employment history matters too. Lenders want to see at least two years of stable income. If you changed jobs recently, you may need to wait a few months before explore, or your new employer may need to provide a letter confirming your position is permanent.

Frequently Asked Questions

Can I get a zero-down mortgage if I have bad credit?

VA and USDA loans have no stated credit score minimum, but lenders typically require 580 or higher. FHA loans officially require 580 as well. If your score is below 580, you will struggle to find a lender for any zero-down product. Spending three to six months paying down credit card balances and making all payments on time can raise your score enough to may have access to.

What if I do not have savings for a down payment or reserves?

Most lenders require reserves (savings equal to two months of mortgage payments) for zero-down loans. If you do not have savings, you may need to delay explore and build some first. Some lenders will waive reserves if you have a co-signer with strong finances, or if you have a gift letter from a family member who is giving you money for closing costs.

Can I use a gift to cover my down payment?

Yes, but with restrictions. On FHA loans, the entire down payment can be a gift from a family member. On VA and USDA loans, you do not need a down payment, so gifts are not relevant. The lender will require a gift letter stating the money is a gift, not a loan you have to repay. The gift giver does not need to be a relative on VA loans, but FHA typically requires a family relationship.

Will I ever be able to remove mortgage insurance from a zero-down loan?

On FHA loans, mortgage insurance stays for the life of the loan if you put down less than 10%. On USDA loans, you can request removal once you reach 25% equity, though this requires a new appraisal and the lender must approve. On VA loans, there is no mortgage insurance to remove. On conventional loans with less than 20% down, you can request removal once you reach 20% equity.

Is a zero-down mortgage a good idea if I can save a down payment?

It depends on your situation. If you can save 10% to 20% down in a reasonable timeframe (one to two years), waiting often makes sense because you will avoid mortgage insurance and get a lower interest rate. If saving that much would take five years or more, a zero-down loan now may be better than waiting. Run the numbers with a lender to compare the total cost of each option.