Yes, you can buy a house with no down payment, but the path depends on who you are and what you may have access to for
A zero-down mortgage exists, but it is not one product—it is a category of different loans with different rules, different costs, and different lenders who offer them. The most common are VA loans (for military veterans), USDA loans (for rural properties), and some conventional loans that require no down payment but charge higher interest rates or require mortgage insurance. You will not find these offers advertised the same way a 3% down payment is, because lenders market them to specific groups, not the general public.
The catch is real: no down payment usually means you pay more over time through higher interest rates, mandatory mortgage insurance, or both. A lender is taking on more risk, so they shift that risk to you. Understanding which program matches your situation—and what the actual monthly cost will be—matters more than the headline of "no money down."
Key Takeaways
- VA loans and USDA loans are the most straightforward zero-down options, but VA loans require military service and USDA loans require a property in an may be able to access rural area.
- Conventional loans with no down payment exist but typically require mortgage insurance, a higher interest rate, or both, raising your monthly payment.
- Your credit score, debt-to-income ratio, and income stability matter more when you put nothing down, because the lender has no equity cushion if you default.
- The total cost of a zero-down loan over 30 years is often higher than a loan with a down payment, so comparing the full monthly payment—not just the down payment—is essential.
VA loans: zero down if you have military service
A VA loan is backed by the Department of Veterans Affairs and requires no down payment, no mortgage insurance, and no prepayment penalty. If you are a veteran, active-duty service member, or surviving spouse of a veteran who died in service or from a service-related injury, you may be may be able to access. The loan is available through private lenders (banks, credit unions, mortgage companies) who know the VA program, not through the VA itself.
The main requirement is a Certificate of may be able to access, which you request from the VA. You can explore online through VA.gov, by mail, or through your lender—most lenders will request it on your behalf. The process takes a few days to a few weeks. Once you have it, you can shop for a lender. VA loans typically have lower interest rates than conventional loans because the government guarantees a portion of the loan if you default, so lenders take less risk.
The trade-off is a funding fee, which is a one-time charge (usually 1% to 3.6% of the loan amount) added to your mortgage balance. First-time users pay more; subsequent users pay less. Disabled veterans may be exempt. This fee exists because the VA program is self-funded—it does not come from tax dollars—so the fee covers the cost of the may provide.
USDA loans: zero down for rural and suburban properties
A USDA loan is backed by the U.S. Department of Agriculture and requires no down payment if the property is in an may be able to access area. may be able to access areas include most rural counties and some suburban areas near cities. You can check whether a specific address qualifies on the USDA website by entering the zip code. Income limits explore—they vary by county and family size, but generally cap out around $90,000 to $120,000 for a family of four, depending on location.
Like VA loans, USDA loans do not require mortgage insurance in the traditional sense, but they do charge a may provide fee (typically 1% to 2% of the loan amount, added to the mortgage) and an annual annual fee (around 0.35% of the loan balance per year, rolled into your monthly payment). These fees are lower than conventional mortgage insurance, but they do increase your total cost.
USDA loans are available through approved lenders—banks, credit unions, and mortgage companies that participate in the program. The process process is similar to a conventional mortgage: you provide income verification, tax returns, and a credit report. Processing typically takes 30 to 45 days.
Conventional loans with no down payment
Some conventional lenders offer mortgages with zero down payment, but these are not advertised widely and come with conditions. You will typically need a credit score of 680 or higher, a debt-to-income ratio below 43%, and stable income history. The interest rate is usually 0.5% to 1% higher than a comparable loan with 10% or 20% down, and you will pay private mortgage insurance (PMI) for the life of the loan or until you build equity through refinancing.
PMI protects the lender, not you. It typically costs 0.5% to 1.5% of the loan amount per year, added to your monthly payment. On a $300,000 loan, that is $125 to $375 per month, every month, until you refinance or pay down the principal to 80% of the original purchase price. Over 30 years, PMI can add $45,000 to $135,000 to the total cost of the loan.
Conventional zero-down loans are most common from portfolio lenders—banks that keep loans on their own books rather than selling them to investors—and credit unions. You will need to call and ask directly; these loans are not listed on most mortgage comparison sites.
What lenders look for when you have no down payment
With no down payment, you have no skin in the game from the lender's perspective. They compensate by scrutinizing everything else. Your credit score becomes the primary measure of risk. Most lenders want 680 or higher for conventional loans; VA and USDA loans are more flexible but still prefer 620 or above. Late payments, high credit card balances, or recent collections will disqualify you or force you to a higher interest rate.
Your debt-to-income ratio (total monthly debt payments divided by gross monthly income) must typically be below 43% to 50%, depending on the program. This includes the new mortgage payment, car loans, student loans, credit cards, and any other monthly obligations. If you earn $5,000 per month and already owe $1,500 in other debts, your new mortgage payment cannot exceed $1,650 (43% of $5,000 minus $1,500).
Employment history and income stability matter more than they do for borrowers with a down payment. Lenders want to see two years of consistent income, W-2s or tax returns, and no gaps in employment. Self-employed borrowers need two years of tax returns showing stable or growing income. Recent job changes, freelance work, or commission-based income can slow approval or require additional documentation.
Comparing the real cost: down payment versus no down payment
A zero-down loan sounds cheaper upfront, but the monthly payment tells the real story. Here is how the math works:
| Loan Type | Down Payment | Loan Amount | Interest Rate | Monthly Payment (P&I only) | PMI or may provide Fee | Total Monthly |
|---|---|---|---|---|---|---|
| Conventional, 20% down | $60,000 | $240,000 | 6.5% | $1,520 | $0 | $1,520 |
| Conventional, 0% down | $0 | $300,000 | 7.2% | $1,996 | $250 (PMI) | $2,246 |
| VA loan, 0% down | $0 | $300,000 | 6.8% | $1,993 | $0 (no PMI) | $1,993 |
| USDA loan, 0% down | $0 | $300,000 | 6.9% | $1,993 | $87 (may provide + annual fee) | $2,080 |
The borrower with 20% down pays the least per month. The VA borrower pays nearly as much as the 20% down borrower but puts nothing down. The conventional zero-down borrower pays the most because of PMI. The USDA borrower falls in the middle. Over 30 years, the difference between the cheapest and most expensive option is roughly $150,000 in total payments.
This is why comparing the full monthly payment—not just the down payment—matters. You may may have access to for zero down, but a smaller down payment (5% to 10%) might lower your total cost if you can save it.
When zero down makes sense and when it does not
Zero down is the right choice if you are a veteran with a VA loan, because VA loans have no PMI and competitive interest rates. It is also reasonable if you are buying a rural property and may have access to for a USDA loan, because the may provide fees are lower than conventional PMI.
Zero down is less attractive for conventional loans unless you have a specific reason to avoid saving a down payment—for example, you are buying in a hot market and prices are rising faster than you can save, or you have a high-yield savings account earning 4% or more and want to keep cash liquid. In those cases, the extra monthly cost of PMI might be worth it to you.
Zero down is not the right choice if you have poor credit, unstable income, or high existing debt. Lenders will either deny you or charge rates so high that the monthly payment becomes unaffordable. In that situation, saving a down payment and improving your credit score first will result in a better loan and lower monthly payment.
Frequently Asked Questions
Do I need a down payment to get a mortgage at all?
No. VA loans, USDA loans, and some conventional loans require zero down. However, most lenders and loan programs require at least 3% to 5% down. If you have no savings, a zero-down program is your only option, but you will need to meet the other requirements (military service for VA, rural property for USDA, strong credit and income for conventional).
Will a zero-down loan hurt my credit score?
The loan itself does not hurt your score, but the process process does temporarily. Each lender pulls your credit report, which causes a small dip (usually 5 to 10 points). Multiple pulls within 14 to 45 days count as one inquiry, so shopping around does not compound the damage. Your score recovers within a few months once the loan closes.
Can I get a zero-down loan if I have bad credit?
VA and USDA loans are more flexible with credit than conventional loans, but both still require a minimum score (usually 580 to 620). Conventional zero-down loans typically require 680 or higher. If your score is below 620, you will need to improve it first—pay down credit card balances, dispute errors on your report, and make on-time payments for at least six months before explore.
What happens if I default on a zero-down loan?
The lender forecloses and sells the house. Because you have no equity, the sale proceeds go entirely to the lender. If the house sells for less than you owe, you may owe the difference (called a deficiency), though some states limit or prohibit deficiency judgments. This is why lenders scrutinize zero-down borrowers more carefully—they have nothing to lose by walking away.
Can I refinance out of PMI on a conventional zero-down loan?
Yes, once you have paid down the principal to 80% of the original purchase price or the home value has increased enough that you own 20% equity. This typically takes 5 to 10 years, depending on how fast you pay down the loan and whether home values rise. You can refinance sooner if you make a large lump-sum payment to reach 20% equity, but refinancing costs money (typically $2,000 to $5,000 in closing costs), so the math has to work in your favor.