Yes, but only through specific loan programs and with conditions attached

You can get a mortgage without a down payment, but you cannot walk into most lenders and ask for one. The loan has to come from a program designed to accept zero down: VA loans for military members, USDA loans for rural properties, or an FHA loan paired with a gift from a family member or nonprofit. Conventional loans—the kind most people use—require at least 3 to 5 percent down. If you have nothing saved, a zero-down program is your only path, and each one has strict rules about who qualifies and what property you can buy.

The trade-off for putting no money down is always higher costs elsewhere. You will pay a higher interest rate, a larger monthly payment, or both. You will also pay mortgage insurance—a monthly fee that protects the lender if you stop paying. On a conventional loan, that insurance disappears once you build equity. On a VA or USDA loan, it may be permanent. Understanding which program fits your situation, and what it will actually cost you each month, matters more than the down payment itself.

Key Takeaways

  • VA loans (for military members and veterans), USDA loans (for rural properties), and FHA loans (with a family gift) are the only paths to zero down; conventional loans require at least 3 to 5 percent.
  • Zero-down loans charge higher interest rates and require mortgage insurance, making your monthly payment larger than it would be with a down payment.
  • VA loans have no mortgage insurance but charge a funding fee; USDA loans have permanent mortgage insurance; FHA loans have mortgage insurance that may never go away depending on your down payment.
  • Your debt-to-income ratio, credit score, and income stability matter more for zero-down approval than they do for conventional loans.
  • The property itself has restrictions: VA loans work anywhere, USDA loans only in rural areas, and FHA loans have limits on the purchase price in your county.

VA loans: zero down for military members and veterans

A VA loan is may provide by the Department of Veterans Affairs and requires no down payment, no mortgage insurance, and no prepayment penalty. You must have served on active duty (usually 90 days or more), be a surviving spouse of a service member, or fall into a few other military categories. The VA does not lend the money itself—a bank or mortgage company does—but the VA promises to cover part of your loss if you default, which is why lenders will lend without a down payment.

Instead of mortgage insurance, you pay a funding fee to the VA, usually 2 to 3.6 percent of the loan amount, rolled into your mortgage. If you are receiving disability compensation from the VA, you may not pay this fee at all. Your interest rate is typically lower than a conventional loan at the same credit score, and you can borrow up to the county limit set by the VA each year—limits vary widely by location and change annually.

The catch: you can only use a VA loan once every ten years unless you are a first-time user, and you can only borrow up to the county limit. If you want to buy a house worth more than that limit, you will need to put money down on the amount above it. Also, the property must be your primary residence—you cannot use a VA loan to buy an investment property or a vacation home.

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 a rural or designated suburban area. The USDA defines "rural" broadly—it includes towns of 10,000 to 20,000 people and some suburbs of larger cities. You can check whether a specific address qualifies on the USDA website by entering the zip code or street address. Income limits apply: you cannot earn more than 115 percent of the median income for your county, though this varies by family size.

Like VA loans, USDA loans charge a mortgage insurance fee instead of requiring a down payment. The upfront fee is 1 percent of the loan amount, and you also pay an annual mortgage insurance premium (usually 0.35 to 0.80 percent of the loan balance per year) for the life of the loan. Your interest rate is typically competitive with conventional loans, and you can borrow the full purchase price plus closing costs.

The main limitation is geography: if the property is in an urban area or does not meet USDA rural criteria, you cannot use this loan. Also, the property must be your primary residence, and you cannot have recently defaulted on a federal loan. If you are self-employed, the USDA will ask for two years of tax returns and may scrutinize your income more closely than a conventional lender would.

FHA loans: zero down with a gift from family or a nonprofit

An FHA loan technically requires 3.5 percent down, but that down payment can come from a gift—money given to you by a family member, an employer, a nonprofit, a government agency, or a religious organization. You cannot borrow the down payment; it must be a true gift with no repayment expected. The person or organization giving the gift does not have to be related to you, though most lenders require a gift letter stating the amount, the giver's relationship to you, and that no repayment is expected.

FHA loans are insured by the Federal Housing Administration, which means the lender is protected if you default. In exchange, you pay mortgage insurance: an upfront premium (1.75 percent of the loan amount, usually rolled into the mortgage) and an annual premium (0.55 to 0.80 percent of the loan balance per year). The annual premium stays on your loan for the life of the loan if you put down less than 10 percent, which is the case with a 3.5 percent gift-funded down payment.

FHA loans have looser credit requirements than conventional loans—you can may have access to with a credit score as low as 580—and they allow higher debt-to-income ratios. However, the property must be your primary residence, and there are county-specific loan limits that cap how much you can borrow. Also, the property must pass an FHA inspection, which is more rigorous than a standard appraisal and can kill a deal if the house has significant safety or structural issues.

How zero-down loans affect your monthly payment and total cost

Putting nothing down means your monthly payment will be higher than it would be with a down payment, and the total interest you pay over the life of the loan will be significantly higher. Here is why: you are borrowing the full purchase price instead of a smaller amount, so the principal is larger. You are also paying mortgage insurance on top of the interest, which adds hundreds of dollars per year to your payment.

On a $300,000 house with a conventional loan and 20 percent down ($60,000), you borrow $240,000. On the same house with an FHA loan and a 3.5 percent gift ($10,500), you borrow $289,500. The difference in principal alone is $49,500. Add in FHA mortgage insurance at 0.80 percent per year, and you are paying roughly $2,316 per year just for insurance—$193 per month. Over 30 years, that is nearly $70,000 in insurance alone, not counting the extra interest on the larger principal.

The trade-off is that you can buy a house sooner instead of saving for years. If you are paying rent and could buy now with a zero-down loan, you may build equity faster than you would by renting and saving. Run the numbers with a mortgage calculator for your specific situation: compare the total cost of renting for five more years plus buying with a down payment against buying now with zero down. The answer depends on local rent prices, home appreciation, and your personal timeline.

Credit score, debt, and income requirements for zero-down loans

Zero-down loans are riskier for lenders, so they have stricter requirements in other areas. Your credit score matters more: VA loans typically want 620 or higher, USDA loans want 620 or higher (though some lenders go lower), and FHA loans accept 580 or higher but give better rates to borrowers with 640 or above. If your score is below 620, a zero-down loan will be difficult or impossible to get.

Your debt-to-income ratio—the percentage of your gross monthly income that goes to debt payments—is also scrutinized more closely. Most lenders want this ratio below 43 percent for conventional loans. For zero-down loans, lenders may accept up to 50 percent, but some are stricter. If you have car loans, credit card balances, student loans, or other debts, the lender will add your proposed mortgage payment to all of those and divide by your gross income. A high ratio can disqualify you or force you to pay a higher interest rate.

Income stability and documentation are critical. If you are self-employed, you will need two years of tax returns and possibly a profit-and-loss statement. If you changed jobs recently, the lender will want a letter from your new employer confirming your salary and that you are not on probation. If you have irregular income (commission, bonus, seasonal work), the lender will average it over two years. The stricter scrutiny exists because the lender has less cushion—you are borrowing more relative to your down payment, so they need confidence you can actually pay.

When a zero-down loan falls through and what to do

The most common reason a zero-down loan falls through is the property inspection or appraisal. FHA loans require an FHA-approved appraiser and an inspection that checks for safety hazards, structural damage, and code violations. If the inspector finds lead paint, mold, missing railings, or a roof in poor condition, the lender may refuse to fund the loan until repairs are made. The seller can agree to fix the issues, you can negotiate a lower price, or the deal can collapse.

Another common reason is a change in your financial situation between pre-approval and closing. If you lose your job, rack up new debt, or miss a payment on an existing loan, the lender may pull the offer. Some lenders do a final credit check a few days before closing; others do not. To protect yourself, do not make large purchases, open new credit accounts, or change jobs between pre-approval and closing if you can avoid it.

If your loan is denied, ask the lender for the specific reason in writing. If it is a credit issue, you can dispute errors on your credit report with the credit bureau. If it is an income issue, you may be able to add a co-borrower or provide additional documentation. If it is a property issue, you can negotiate repairs with the seller or walk away. Do not assume the first "no" is final—some lenders are stricter than others, and a different lender may approve you.

Frequently Asked Questions

Can I use a VA loan and a USDA loan at the same time?

No. You can only have one primary mortgage at a time. However, you can use a VA loan to buy one property and a USDA loan to buy a different property if you have two primary residences, though this is rare and lenders scrutinize it closely. In practice, you choose one program based on which property you are buying and which program offers better terms.

What if I have a gift for a down payment but do not want to use an FHA loan?

You can use the gift toward a conventional loan down payment. Conventional loans allow gifts from family members and nonprofits, just like FHA loans do. A gift can help you reach the 3 to 5 percent down payment threshold for a conventional loan, which may have lower mortgage insurance costs and a shorter insurance period than an FHA loan. Ask your lender whether a gift letter is required.

Do I have to pay mortgage insurance forever on a zero-down loan?

It depends on the loan type. On an FHA loan with less than 10 percent down, mortgage insurance is permanent—you pay it for the life of the loan. On a VA loan, there is no mortgage insurance at all, only the upfront funding fee. On a USDA loan, mortgage insurance is also permanent. You cannot refinance to remove it unless you refinance into a different loan type (like a conventional loan) and put down at least 20 percent.

Can I get a zero-down loan if I am self-employed?

Yes, but it is harder. Lenders want two years of tax returns, profit-and-loss statements, and sometimes a CPA letter confirming your income. Self-employed borrowers are seen as higher risk, so you may pay a higher interest rate or face stricter debt-to-income limits. Some lenders specialize in self-employed borrowers and have faster approval processes; shop around rather than applying to the first lender you find.

What happens if I refinance a zero-down loan later?

You can refinance into a different loan type or a lower interest rate with the same lender. If you refinance into a conventional loan and have built at least 20 percent equity, you can drop the mortgage insurance. If you refinance into another zero-down loan (VA, USDA, or FHA), the mortgage insurance rules of the new loan apply. Refinancing costs money in closing costs and fees, so calculate whether the savings in interest or insurance justify the upfront cost.