Yes, but the loan type and your situation determine whether it's actually available to you
You can get a home loan without a down payment through specific programs: VA loans (if you served in the military), USDA loans (if you're buying in a rural area), and some conventional loans backed by lenders willing to take the risk. The catch is that each program has its own rules about who qualifies, what property types work, and what you'll pay in interest and fees to offset the lender's risk.
No down payment does not mean no upfront costs. You'll still pay closing costs—typically 2 to 5 percent of the loan amount—which cover appraisal, title search, underwriting, and other services. Some programs let you roll these into the loan itself, but that increases what you owe overall.
Key Takeaways
- VA loans and USDA loans both allow zero down payment, but VA loans require military service and USDA loans require a property in an may be able to access rural area.
- Conventional loans without a down payment exist but typically require a higher credit score and come with mortgage insurance that adds to your monthly payment.
- Closing costs (2 to 5 percent of the loan) are separate from the down payment and usually still come out of your pocket unless you negotiate with the seller or lender to cover them.
- Interest rates on zero-down loans are often higher than rates on loans with a down payment, because the lender has more risk if you default.
VA loans: zero down if you have military service history
A VA loan is issued by a private lender but may provide by the Department of Veterans Affairs. The may provide means the VA will cover part of your loss if you stop paying, so lenders are willing to lend without requiring a down payment. You must have served on active duty, be a surviving spouse of a service member, or meet other specific military service requirements.
The VA charges a funding fee (typically 1.4 to 3.6 percent of the loan amount, depending on your service history and down payment) that gets added to your loan. This is not the same as mortgage insurance—it's a one-time fee that compensates the VA for the may provide. You can roll it into the loan balance or pay it upfront.
VA loans have no maximum loan amount set by the VA itself, though individual lenders set their own limits. There's also no requirement to use the full benefit—you can use a VA loan multiple times if you've repaid a previous one or if you have remaining entitlement.
USDA loans: zero down in rural and some suburban areas
USDA loans are backed by the U.S. Department of Agriculture and designed for people buying in rural areas. The USDA defines may be able to access areas by population and location, not by state—some rural parts of high-cost states may have access to, while some suburban areas near cities do not. You can check whether a specific address is may be able to access on the USDA website.
Like VA loans, USDA loans require no down payment and are may provide by a government agency, so lenders accept the risk. You pay a may provide fee (typically 1 to 2 percent of the loan) that can be rolled into the loan amount. You also pay an annual fee (0.35 to 0.45 percent of the loan balance per year) for the first seven years, which appears as a separate line on your mortgage statement.
USDA loans have income limits that vary by county and family size. The limit is usually 115 percent of the area median income, though some areas have higher limits. You must also be a U.S. citizen or permanent resident and have a valid Social Security number.
Conventional loans without a down payment: rare and expensive
Some conventional lenders will issue a mortgage with zero down payment, but this is uncommon and comes with trade-offs. Your credit score typically needs to be 680 or higher, and your debt-to-income ratio (total monthly debt divided by gross monthly income) usually cannot exceed 43 percent. Some lenders are stricter.
Without a down payment, you'll pay private mortgage insurance (PMI), which protects the lender if you default. PMI typically costs 0.5 to 1.5 percent of the loan amount per year, added to your monthly payment. You'll keep paying it until you've built 20 percent equity in the home through payments, which takes years. Some lenders require PMI for the life of the loan if you put down less than 10 percent.
Interest rates on zero-down conventional loans are usually 0.25 to 0.75 percent higher than rates on loans with a 20 percent down payment, because the lender's risk is greater. Over a 30-year loan, this difference adds tens of thousands of dollars to what you pay.
What closing costs you'll pay regardless of down payment
Closing costs are separate from the down payment and cover the services needed to complete the loan: appraisal, title search, title insurance, underwriting, attorney fees, and recording fees. These typically run 2 to 5 percent of the loan amount. On a $300,000 home, that's $6,000 to $15,000.
You can sometimes negotiate with the seller to cover part or all of your closing costs, especially in a buyer's market. You can also ask the lender whether they offer a "no-cost" loan, which rolls closing costs into the interest rate instead—but this means you pay more in interest over time. Some lenders offer credits that cover closing costs if you accept a higher interest rate.
VA and USDA loans often have lower closing costs than conventional loans because the government may provide reduces the lender's risk. However, you still cannot avoid them entirely.
How your credit score and debt affect your chances
Lenders use your credit score to decide whether to lend and what interest rate to offer. For VA loans, the VA itself has no minimum credit score requirement, but most lenders require 620 or higher. For USDA loans, the requirement is typically 640 or higher, though some lenders go as low as 580. For conventional zero-down loans, expect to need 680 or higher.
Your debt-to-income ratio matters equally. This is your total monthly debt payments (mortgage, car loans, credit cards, student loans, child support) divided by your gross monthly income before taxes. Most lenders want this to be 43 percent or lower. If you earn $5,000 per month, your total debt payments should not exceed $2,150. A zero-down loan makes this harder to achieve because your monthly mortgage payment will be higher without equity built in.
Comparing the three routes: when each one makes sense
| Loan Type | Who Qualifies | Property Requirements | Upfront Costs | Monthly Costs |
|---|---|---|---|---|
| VA Loan | Military service members, veterans, surviving spouses | Must be primary residence; no maximum price | Funding fee (1.4–3.6%), closing costs | No PMI; funding fee rolled into payment |
| USDA Loan | U.S. citizens or permanent residents; income limits explore | Rural or may be able to access suburban area; single-family home | may provide fee (1–2%), annual fee, closing costs | Annual fee (0.35–0.45%) for 7 years |
| Conventional (Zero Down) | Credit score 680+; debt-to-income 43% or lower | Any property type; no location restrictions | Closing costs (2–5%) | PMI (0.5–1.5% annually) until 20% equity |
Choose a VA loan if you have military service history—it's the cheapest zero-down option with no mortgage insurance. Choose a USDA loan if you're buying in a rural area and your income is within limits; the annual fee is lower than PMI on a conventional loan. Choose a conventional zero-down loan only if you don't may have access to for VA or USDA and you have a strong credit score and low debt; the higher interest rate and PMI make it the most expensive route.
Frequently Asked Questions
Can I use a zero-down loan to buy a second home or investment property?
No. VA loans, USDA loans, and most conventional zero-down programs require the property to be your primary residence—the place you live most of the year. Investment properties and second homes require a down payment, typically 15 to 25 percent.
What happens to my zero-down loan if I sell the house in five years?
You pay off the remaining loan balance from the sale proceeds. If the home has appreciated and you've paid down principal, you'll have equity. If the home has lost value, you may owe more than it's worth (called being underwater), and you'll need to bring cash to closing or negotiate a short sale with the lender.
Can I get a zero-down loan if I have bad credit?
VA loans have no VA-set minimum credit score, so some lenders will work with scores as low as 580–600 if you have compensating factors like stable employment or savings. USDA loans typically require 640 or higher. Conventional zero-down loans usually require 680 or higher. Check with lenders directly—requirements vary.
Do I have to pay the funding fee or may provide fee upfront, or can I roll it into the loan?
You can roll it into the loan balance on both VA and USDA loans, which means you don't pay it out of pocket at closing. However, you'll pay interest on it for the life of the loan, so the total cost is higher. Some borrowers pay it upfront if they have the cash.
If I get a zero-down loan, can I refinance later to remove PMI or the annual fee?
Yes. Once you've built equity through payments or home appreciation, you can refinance into a conventional loan without PMI, or refinance a USDA loan into a conventional loan to drop the annual fee. Refinancing costs money (closing costs again), so it only makes sense if the savings outweigh the costs.