No down payment mortgages exist, but they come with real tradeoffs
Yes, you can get a mortgage without putting money down. The most common route is a VA loan if you are a veteran or active-duty service member—these require zero down and are backed by the Department of Veterans Affairs. USDA loans in rural areas also require no down payment if you meet income limits. For conventional mortgages, you cannot avoid a down payment entirely, but some lenders will let you put down as little as 3 percent.
The catch: no down payment means higher monthly payments, higher interest rates, and mandatory mortgage insurance that protects the lender if you stop paying. A lender takes on more risk when you have no skin in the game, and they price that risk into your loan. Over 30 years, the difference between a no-down mortgage and one with 20 percent down can add up to tens of thousands of dollars in extra interest and insurance premiums.
Key Takeaways
- VA loans and USDA loans are the only mortgage types that genuinely require zero down payment; conventional loans require at least 3 percent.
- No down payment mortgages charge higher interest rates and require mortgage insurance, which increases your monthly payment by hundreds of dollars.
- VA loans are available only to veterans, active-duty service members, and some surviving spouses; USDA loans require you to live in a designated rural area and meet income limits.
- If you cannot save a down payment, exploring first-time homebuyer programs in your state or county may offer down payment help rather than a no-down mortgage.
VA loans: zero down if you have military service
A VA loan is a mortgage may provide by the Department of Veterans Affairs. The may provide means the VA will cover part of your loss if you default, so lenders are willing to lend without requiring you to put money down. You must have served on active duty, be currently serving, or be a surviving spouse of a service member who died in service or from a service-connected disability.
To use a VA loan, you 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 process takes a few days to a few weeks. Once you have it, you can shop for a home and apply for the mortgage. VA loans typically have lower interest rates than conventional mortgages because the government may provide reduces the lender's risk.
The tradeoff: VA loans charge a funding fee—usually 2.3 percent of the loan amount for first-time users, though it varies based on your down payment (if you choose to make one) and military branch. This fee is rolled into your loan, so you pay interest on it over 30 years. Some lenders waive the fee for disabled veterans, so ask before you assume you have to pay it.
USDA loans: zero down in rural areas with income limits
USDA loans are mortgages backed by the U.S. Department of Agriculture for homes in rural areas. Like VA loans, they require zero down payment. You must live in a county the USDA designates as rural—which includes some areas on the edges of cities—and your household income cannot exceed a limit set by county. That limit varies widely; some rural counties allow households earning $90,000 or more, while others cap it at $60,000.
You can check whether your address qualifies using the USDA's may be able to access map on rd.usda.gov. If your county qualifies, you can apply through any lender that offers USDA loans. The application process is similar to a conventional mortgage: you provide income verification, credit history, and employment records. Approval typically takes 30 to 45 days.
USDA loans charge a may provide fee (usually 1 percent of the loan amount) and an annual insurance premium (0.55 percent of the loan balance per year). Both are rolled into your monthly payment. These costs are lower than conventional mortgage insurance, but they still add several hundred dollars per month to your payment compared to a 20 percent down conventional loan.
Conventional mortgages with 3 percent down
If you do not may have access to for a VA or USDA loan, conventional mortgages allow you to put down as little as 3 percent. This is not zero down, but it is the closest option for most buyers. A 3 percent down payment on a $300,000 home is $9,000—much less than the 20 percent ($60,000) that avoids mortgage insurance.
With a 3 percent down conventional loan, you will pay private mortgage insurance (PMI), which protects the lender. PMI typically costs 0.5 to 1.5 percent of your loan amount per year, depending on your credit score and the size of your down payment. On a $300,000 loan, that is $1,500 to $4,500 per year, or $125 to $375 per month.
You can remove PMI once you have paid down the loan to 80 percent of the home's original value, which usually takes 8 to 12 years. Some lenders will remove it automatically when you hit that threshold; others require you to request it. Ask your lender about their PMI removal policy before you sign.
How no down payment affects your total cost
A no down payment mortgage costs significantly more over time than one with a larger down payment. Here is a simplified comparison on a $300,000 home at current market rates (rates vary by lender and credit score):
| Down Payment | Monthly Payment (Principal + Interest) | Mortgage Insurance | Total Monthly Cost | Total Interest Paid Over 30 Years |
|---|---|---|---|---|
| 0% (VA or USDA) | ~$1,432 | $200–$400 | ~$1,632–$1,832 | ~$215,000 |
| 3% | ~$1,389 | $250–$375 | ~$1,639–$1,764 | ~$200,000 |
| 20% | ~$1,146 | $0 | ~$1,146 | ~$112,000 |
These numbers are examples only; your actual payment depends on your interest rate, credit score, loan term, and local property taxes and insurance. The point is that no down payment saves you cash upfront but costs you thousands more over the life of the loan.
Down payment help programs as an alternative
If you want to avoid mortgage insurance but cannot save a large down payment, explore down payment help programs in your state or county. Many states and cities offer grants or forgivable loans that cover part or all of your down payment. These programs often have income limits and are designed for first-time homebuyers.
Examples include New York's Housing Finance Agency programs, California's CalHFA down payment assistance, and various city-level programs in places like Philadelphia and Denver. The terms vary: some programs give you money that you do not have to repay, while others are forgivable loans that disappear if you stay in the home for a set number of years.
To find programs in your area, search "[your state] down payment assistance" or contact your local housing authority. Many programs have waiting lists or limited funding, so start your search early. A down payment help grant might let you put down 5 or 10 percent, which is enough to avoid mortgage insurance or reduce it significantly—and costs you far less than a no-down mortgage over time.
What happens if you cannot may have access to for any of these options
If your credit score is too low, your debt-to-income ratio is too high, or you do not have enough income to may have access to for any mortgage, a no-down option will not solve the problem. Lenders still run the same credit and income checks regardless of down payment size. A no-down mortgage does not lower the lending standards; it just shifts the risk.
If you are not ready to buy yet, focus on raising your credit score and paying down existing debt. Even a 50-point improvement in your credit score can lower your interest rate by 0.25 to 0.5 percent, which saves you tens of thousands over 30 years. Paying down credit cards and other debts also improves your debt-to-income ratio, making you a stronger candidate for any mortgage.
If you are a renter and want to build toward homeownership, some nonprofits and community organizations offer free financial counseling and help with credit repair. HUD-approved housing counselors can review your situation and tell you what steps will actually move you closer to a mortgage you can afford.
Frequently Asked Questions
Can I get a no down payment mortgage if my credit score is below 600?
Most lenders require a credit score of at least 620 for a conventional mortgage and 580 for an FHA loan. VA loans typically require 620 or higher, though some lenders go lower. USDA loans usually require 640 or higher. A no-down mortgage does not lower these minimums. If your score is below 620, work on raising it before you apply.
What is the difference between a VA loan and a USDA loan?
VA loans are for military veterans and active-duty service members; USDA loans are for anyone buying in a rural area who meets income limits. Both require zero down. VA loans typically have lower interest rates but charge a funding fee. USDA loans charge a may provide fee and annual insurance premium. You can use only one or the other, not both, for a single home purchase.
Can I remove mortgage insurance from a no-down conventional mortgage?
Yes, but only if you put down 3 percent (not zero). Once your loan balance drops to 80 percent of the home's original purchase price, you can request PMI removal. This usually takes 8 to 12 years of payments. VA and USDA loans do not have removable insurance; their costs are permanent.
Is a no down payment mortgage worth it if I have the money saved?
Usually not. If you have saved 10 or 20 percent, putting it down saves you thousands in interest and insurance over 30 years. The only exception is if you can invest that money and earn a return higher than your mortgage interest rate—which is rare and risky. Most financial advisors recommend putting down at least 10 to 20 percent if you can.
Do I need a co-signer for a no down payment mortgage?
No. VA and USDA loans do not require a co-signer if you meet the income and credit requirements on your own. Conventional mortgages with 3 percent down also do not require one, though a co-signer with stronger credit can help you get a lower interest rate. Ask your lender whether a co-signer would improve your terms.