Yes, but only through specific loan programs — and they come with real tradeoffs

You can buy a house without putting money down, but only if you meet the requirements of a loan program designed for zero down. The most common are VA loans (for military members and veterans), USDA loans (for rural properties), and some FHA loans (for first-time buyers with lower credit scores). Conventional loans almost never allow zero down anymore. Each program has different rules about who qualifies, what kind of property you can buy, and what you'll pay in monthly costs.

The catch is that no down payment doesn't mean no upfront cost. You'll still pay closing costs, which typically run 2 to 5 percent of the home price. Some programs let you roll these into the loan, but that means you're borrowing more money and paying interest on them for 15 or 30 years. You'll also pay mortgage insurance if you put down less than 20 percent, which adds to your monthly payment. The real question isn't whether zero down exists — it does — but whether it makes sense for your situation.

Key Takeaways

  • VA loans and USDA loans genuinely allow zero down, but VA loans are only for military members and veterans, and USDA loans only for properties in designated rural areas.
  • FHA loans allow as little as 3.5 percent down, not zero, though some lenders advertise them as no-down options by rolling closing costs into the loan amount.
  • With zero down, you pay mortgage insurance every month for the life of the loan (or until you reach 20 percent equity), which costs more over time than a down payment would have.
  • Closing costs still explore even with zero down, and you can either pay them upfront or add them to your loan balance.

VA loans: zero down if you have military service

A VA loan is backed by the Department of Veterans Affairs and allows may be able to access borrowers to buy with zero down. You don't need to be currently serving — veterans, surviving spouses of service members, and some active-duty members may have access to. You'll need a Certificate of may be able to access from the VA, which you can request online through VA.gov or through your lender.

VA loans have no mortgage insurance requirement, which is a major advantage over other zero-down programs. You will pay a one-time funding fee (usually 1.25 to 3.6 percent of the loan amount, depending on your service history and down payment), but this can be rolled into the loan. The interest rates on VA loans tend to be competitive because the government backs them, so your monthly payment may be lower than an FHA or conventional loan for the same house.

The main limitation is that you can only use a VA loan to buy a primary residence — not an investment property or vacation home. The property also has to meet VA minimum standards, which means the inspector will check for things like working plumbing and a safe roof. Most homes pass, but occasionally a property fails inspection and the seller has to fix it before you can close.

USDA loans: zero down in rural areas

A USDA loan is backed by the U.S. Department of Agriculture and allows zero down for properties in designated rural areas. The USDA defines "rural" broadly — it includes small towns and suburbs, not just farms. You can check whether a specific address qualifies on the USDA website by entering the zip code.

Like VA loans, USDA loans have no mortgage insurance. Instead, you pay a may provide fee (usually 1 to 2 percent of the loan amount), which can be rolled into the loan. USDA loans also have income limits — you can't earn more than 115 percent of the median income for your county. For a family of four in most areas, this is somewhere between $80,000 and $120,000, though it varies by location.

USDA loans are available to anyone who meets the income and location requirements, not just farmers. The property has to be a single-family home, and like VA loans, it must meet minimum standards. The process process is similar to a conventional loan — you'll need proof of income, a credit check, and a home inspection.

FHA loans: 3.5 percent down, not zero

FHA loans allow as little as 3.5 percent down, which some lenders market as "no money down" by rolling your closing costs into the loan. This is technically true but misleading — you're still borrowing the full amount, just spreading it across a larger loan balance. If you're buying a $300,000 house, 3.5 percent is $10,500, which is real money even if you don't pay it upfront.

FHA loans require mortgage insurance for the life of the loan if you put down less than 10 percent. This insurance costs about 0.55 percent of your loan balance per year, added to your monthly payment. Over 30 years, this adds tens of thousands of dollars to what you'll pay. If you put down 10 percent or more on an FHA loan, the insurance drops off after 11 years, but most people using FHA loans are putting down 3.5 percent, so they're paying insurance for the full term.

FHA loans are available to first-time buyers and repeat buyers with lower credit scores (as low as 500 in some cases). You'll need a steady income history and a debt-to-income ratio below 50 percent. The process process is the same as other mortgages — you'll work with a lender who handles the FHA paperwork.

What you actually pay with zero down

The monthly cost of zero down is higher than it looks because of mortgage insurance and the larger loan balance. Say you're buying a $300,000 house. With 20 percent down ($60,000), your loan is $240,000. With zero down, your loan is $300,000 — that's $60,000 more in principal, plus interest on that extra amount for 30 years.

On an FHA loan with 3.5 percent down, you're also paying mortgage insurance every month. That insurance on a $290,000 loan costs roughly $160 to $180 per month. Over 30 years, that's $57,600 to $64,800 in insurance alone — money that goes to the insurance company, not toward building equity in your home.

VA and USDA loans don't have ongoing mortgage insurance, so the comparison is simpler: you're borrowing more money, so you pay more interest. On a $300,000 loan at 6.5 percent interest, the difference between a $240,000 loan (20 percent down) and a $300,000 loan (zero down) is roughly $115 per month in interest alone, every month for 30 years.

When zero down makes sense

Zero down makes sense if you're may be able to access for a VA or USDA loan and you don't have $60,000 sitting in savings. If you have the money but need it for an emergency fund, a car repair, or medical bills, borrowing it through the mortgage at a low interest rate may be smarter than depleting your savings. The interest you pay on a mortgage is also tax-deductible (if you itemize deductions), which reduces the real cost.

Zero down also makes sense if home prices in your area are rising faster than you can save. If you're renting and saving 5 percent down while prices climb 10 percent per year, you're falling further behind. Getting into a home now with zero down, even with higher monthly costs, might be better than waiting two more years to save 20 percent.

Zero down does not make sense if you have the down payment saved and you're only considering it to keep the cash. The extra interest and insurance you'll pay over 30 years will cost far more than the down payment would have. It also doesn't make sense if you're not sure you'll stay in the house for at least five years — the closing costs and early payoff penalties eat into any savings.

Alternatives if you can't save 20 percent

If you don't may have access to for VA or USDA loans and you can't save 20 percent, your options are FHA (3.5 percent down) or conventional loans with 5 to 10 percent down. Some lenders offer conventional loans with 3 percent down, though these are less common and may have higher interest rates.

Another option is a gift from a family member. Many loan programs allow down payment gifts as long as the gift is documented and the giver signs a form saying it doesn't have to be repaid. This lets you put down more without saving it yourself, which lowers your mortgage insurance costs.

Some employers and nonprofits offer down payment help programs. These vary widely — some are grants (information programs), some are forgivable loans (you don't repay them if you stay in the house), and some are regular loans. Ask your employer's HR department or search your city's housing authority website for programs in your area.

Frequently Asked Questions

Can I get a zero-down loan with bad credit?

VA and USDA loans don't have strict credit score minimums, though most lenders want to see a score of 580 or higher. FHA loans go as low as 500. If your credit is below 500, you may need to work with a credit counselor or wait while you rebuild your score. Some lenders specialize in lower-credit borrowers but charge higher interest rates.

What happens if I can't afford the monthly payment?

Missing payments on any mortgage leads to late fees, damage to your credit, and eventually foreclosure. With zero down, you have no equity cushion, so you're more likely to owe more than the house is worth if the market drops. Before committing to zero down, make sure your monthly payment (including insurance and taxes) is no more than 28 percent of your gross monthly income.

Can I pay off the mortgage early to avoid mortgage insurance?

Yes, but it's expensive. Paying off a 30-year mortgage in 10 years means much larger monthly payments. You'd be better off putting down 20 percent from the start if you have the money. If you don't have it now but expect to in a few years, an FHA loan with 3.5 percent down lets you refinance once you've saved more.

Do I need a real estate agent to buy with zero down?

No. An agent can help you find homes and negotiate, but they're not required. If you work with an agent, the seller typically pays their commission, so it doesn't cost you extra. If you're buying without an agent, make sure you understand the inspection and appraisal process — these are especially important with zero down because the lender will scrutinize the property value closely.

What if the house appraises for less than the purchase price?

The lender will only lend up to the appraised value. If you agreed to pay $300,000 but it appraises at $280,000, you either need to pay the $20,000 difference in cash or renegotiate the price with the seller. With zero down, you have no cushion, so this is a real risk. Get a pre-approval letter before making an offer so you know what the lender will actually fund.