No-down-payment mortgages exist, but they come with real costs and strict requirements

Yes, you can get a mortgage without putting money down, but lenders will charge you more for taking on that risk. Instead of a down payment, you'll pay a higher interest rate, mortgage insurance premiums, or both. The most common route is a VA loan (for military members and veterans), which requires zero down and no mortgage insurance. USDA loans (for rural properties) also allow zero down. Conventional loans with no down payment exist but are rare and expensive. FHA loans require at least 3.5% down, so they're not truly zero-down, though they're the cheapest insured option available.

The catch: lenders protect themselves when you put nothing down by either charging you a higher interest rate for the life of the loan, requiring you to pay mortgage insurance (which can add $100 to $300+ per month), or both. You'll also need strong credit, stable income, and clean debt history to may have access to. Lenders want proof you can handle the payment even if your income drops.

Key Takeaways

  • VA loans and USDA loans genuinely require zero down and no mortgage insurance, but VA loans are only for military-connected borrowers and USDA loans only for rural properties.
  • Conventional no-down mortgages exist but charge higher interest rates and require mortgage insurance, making them more expensive over time than putting down even 5%.
  • FHA loans require 3.5% down minimum and always include mortgage insurance, but the insurance is cheaper than conventional loans.
  • Lenders will require a credit score of at least 620 (often 640+), proof of stable income, and low existing debt to approve any zero-down loan.
  • Your total monthly payment will include principal, interest, taxes, insurance, and mortgage insurance—the last one adds significantly when you put nothing down.

VA loans: zero down, no mortgage insurance, military only

If you're a current or former military member, a surviving spouse of a service member, or a National Guard member with the right service record, you may may have access to for a VA loan. These loans require zero down payment and zero mortgage insurance. The VA guarantees a portion of the loan to the lender, which is why the lender doesn't need you to put money down or pay insurance premiums.

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. The VA will also charge you a one-time funding fee (usually 2.3% of the loan amount for first-time users, lower if you put money down, higher if you're a surviving spouse). That fee gets rolled into the loan, so you don't pay it upfront. Your credit score typically needs to be 620 or higher, and your debt-to-income ratio usually can't exceed 41%, though some lenders go to 50% if your credit is strong.

USDA loans: zero down for rural and some suburban properties

USDA loans are designed for people buying in rural areas or certain suburban zones. Like VA loans, they require zero down and no mortgage insurance. Instead, the USDA guarantees the loan, so the lender takes less risk. You'll pay a one-time may provide fee (usually around 1% of the loan amount) and an annual fee (around 0.35% per year), both rolled into the loan.

The property must be in an may be able to access area—you can check the USDA may be able to access map on their website. Your income can't exceed the limit for your county (limits vary widely by location). Credit score requirements are typically 620 or higher. The debt-to-income ratio limit is usually 41% to 43%, depending on the lender. USDA loans are slower to process than conventional loans because the USDA has to verify the property location and your income against rural development guidelines.

Conventional mortgages with no down payment: rare and expensive

Some conventional lenders will approve a mortgage with zero down, but you'll pay for it. Your interest rate will be 0.5% to 1% higher than someone putting 20% down. You'll also pay private mortgage insurance (PMI), which protects the lender if you default. PMI typically costs 0.5% to 1.5% of the loan amount per year, added to your monthly payment. On a $300,000 loan, that's $1,500 to $4,500 per year, or $125 to $375 per month.

You can remove PMI once you've paid down the loan to 80% of the home's value, but that takes years. Credit score requirements are stricter for zero-down conventional loans—most lenders want 700 or higher. Debt-to-income ratio limits are usually 43% or lower. These loans are harder to find because most lenders prefer to sell them to Fannie Mae or Freddie Mac, which have stricter guidelines for zero-down loans.

FHA loans: 3.5% down, not zero, but cheaper insurance

FHA loans aren't truly zero-down, but they're the cheapest insured option if you don't have much saved. They require a minimum 3.5% down payment. You'll pay mortgage insurance in two forms: an upfront premium (1.75% of the loan amount, usually rolled into the loan) and an annual premium (0.55% to 0.8% per year, depending on your down payment and loan amount). The annual insurance stays on the loan for the life of the loan if you put down less than 10%.

FHA loans accept credit scores as low as 580 (though 640+ is more common). Debt-to-income ratio limits are usually 43% to 50%. The tradeoff: you need at least $10,500 saved for a $300,000 home (the 3.5% down payment), and you'll pay insurance for 30 years. FHA loans are faster to process than USDA loans and easier to find than zero-down conventional loans.

What lenders actually check when you have no down payment

Without a down payment, lenders scrutinize your income and debt more carefully. They want to see at least two years of stable employment history, ideally in the same field. If you're self-employed, they'll ask for two years of tax returns and may average your income across those years. They'll pull your credit report and look for late payments, collections, or high credit card balances. A credit score below 620 will disqualify you from most programs.

They'll calculate your debt-to-income ratio by adding up all your monthly debt payments (car loans, student loans, credit cards, child support) and dividing by your gross monthly income. The mortgage payment itself counts toward this ratio. If you earn $5,000 per month and have $1,500 in existing debt, you can only take on $1,650 more in mortgage payment (at a 43% ratio), which limits how much you can borrow. Lenders will also verify your down payment source—they want to see that you saved the money, not borrowed it from someone else.

The real cost of zero down over 30 years

A zero-down conventional mortgage on a $300,000 home at 7% interest with PMI costs roughly $2,100 per month (principal, interest, taxes, insurance, and PMI combined, depending on your location and property tax rate). The same home with 20% down ($60,000) at 6.5% interest costs roughly $1,750 per month. The difference is $350 per month, or $126,000 over 30 years. That's the cost of not having $60,000 saved.

A VA loan on the same $300,000 home at 6.5% interest costs roughly $1,850 per month (no PMI, but you paid a funding fee rolled into the loan). An FHA loan with 3.5% down at 7% interest costs roughly $2,050 per month (principal, interest, taxes, insurance, and FHA mortgage insurance). The VA loan is cheapest because there's no ongoing insurance. FHA is middle ground. Conventional zero-down is most expensive.

Frequently Asked Questions

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

Most zero-down programs require a credit score of at least 620, and many lenders prefer 640 or higher. VA and USDA loans have the most flexible credit requirements. Conventional zero-down loans are nearly impossible with a score below 680. If your credit is below 620, you'll need to wait and build it up, or save for a down payment to improve your chances.

What if I'm self-employed?

Self-employed borrowers can get zero-down mortgages, but lenders will ask for two years of tax returns and may average your income across those years. If your income is declining or inconsistent, you'll have a harder time. Some lenders will also require a CPA letter confirming your income. The process takes longer than for W-2 employees.

Can I remove mortgage insurance later?

Yes, but only on conventional and FHA loans. On conventional loans, PMI drops automatically when you reach 80% loan-to-value (usually after 8 to 12 years of payments). On FHA loans, mortgage insurance stays for the life of the loan if you put down less than 10%. VA and USDA loans have no mortgage insurance, so there's nothing to remove.

Do I need a co-signer for a zero-down mortgage?

Most lenders won't require a co-signer if your credit and income may have access to on their own. However, if your debt-to-income ratio is too high or your credit is weak, a co-signer with stronger finances can help. The co-signer's income and debts count toward the ratio, so they need to be in good financial shape themselves.

What's the difference between a zero-down VA loan and a zero-down conventional loan?

VA loans have no mortgage insurance and lower interest rates because the VA guarantees them. You pay a one-time funding fee instead. Conventional zero-down loans charge higher interest rates and require PMI, making them more expensive. If you may have access to for a VA loan, it's almost always cheaper than conventional zero-down.