Can You Buy a Home With No Money Down? Your Options

Saving for a down payment is often the biggest hurdle between renting and owning. What many people do not realize is that certain loan programs let eligible buyers purchase a home without putting any money down at all. Others require only a small amount. Knowing which path fits you can save years of waiting.

The Two Main Zero Down Programs

VA Loans

For service members, veterans and some surviving spouses, a VA home loan is one of the most valuable benefits available. With full entitlement, eligible borrowers can typically buy with $0 down. VA loans also do not charge monthly mortgage insurance, which can make the payment noticeably more manageable.

A few things to know:

• Eligibility is based on service: Requirements depend on how long and when you served, whether on active duty or in the National Guard or Reserves. A Certificate of Eligibility confirms your status, and your loan officer can usually help request it.
• There is a funding fee for most borrowers: It can often be rolled into the loan, and some veterans, such as many with service-connected disabilities, are exempt.
• Your entitlement matters: If you have used your benefit before or still have a VA loan open, the amount you can borrow with nothing down may be affected.

USDA Loans

A USDA loan is designed to help moderate income households buy in eligible rural and some suburban areas. Many buyers are surprised to learn how many communities qualify, so it is worth checking even if you do not think of your area as rural.

• Location rules: The home must sit in a USDA eligible area, which you can confirm on the USDA property eligibility map.
• Household income limits: Total household income must fall under the limit for your county and household size.
• Credit and debt guidelines: Lenders look at your credit history and debt-to-income ratio, much like other loan types.
• Primary residence only: The home must be where you live, not an investment or vacation property.

When You Need a Small Down Payment Instead

If you do not qualify for VA or USDA financing, you may still be closer to owning than you think. Two popular programs keep the upfront amount low:

• Conventional loans: Eligible buyers may put down as little as 3%. With less than 20% down, private mortgage insurance applies, but it can typically be removed once you reach 80% loan-to-value.
• FHA loans: With a credit score of 580 or higher, buyers can put down 3.5%. FHA guidelines can be more flexible about credit history, which helps many first-time buyers. These loans include an upfront mortgage insurance premium of 1.75% along with monthly mortgage insurance.

You can explore more of these choices on our low down payment options page.

Zero Down Does Not Mean Zero Cash

Even with no down payment, buying a home usually involves some money out of pocket. Plan for items like:

• Closing costs, which can sometimes be offset by seller concessions or other assistance, depending on the program and your contract
• An earnest money deposit when your offer is accepted
• A home inspection and appraisal
• Prepaid items such as homeowners insurance and property tax reserves

It is also smart to keep a cushion in savings after closing for repairs and life’s surprises. Borrowing the full purchase price means starting with little equity, so a healthy emergency fund matters even more.

Finding the Right Fit

The best choice depends on your service history, where you want to live, your income, your credit and how much you have saved. Sometimes a small down payment on one program works out better than zero down on another, so comparing side by side is worth the effort.

If you would like help figuring out whether a zero down or low down payment loan fits your plans, reach out to FLO Mortgage. One of our loan officers will gladly review your options with you and answer every question along the way.

This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.