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Buying a Home

How to Buy a House With No Money Down: 5 Real Ways (and the Catch)

Zero-down home loans exist, but only a few. Here are five legit ways to buy with little or nothing down, and the closing costs and fees you'll still need to plan for.

By · Updated · 4 min read

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Quick answers

  • VA loans (eligible veterans and service members) and USDA loans (eligible areas and incomes) allow 0% down.
  • For FHA and conventional loans, down payment assistance or a family gift can cover the 3%–3.5% you’d otherwise pay.
  • “No money down” rarely means “no money at all”: closing costs, inspections, appraisal and moving still cost money.
  • Borrowing 100% means higher monthly payments and zero equity on day one.

Saving tens of thousands for a down payment is the biggest roadblock for many buyers. The good news: a few loan programs don’t require any down payment at all, and others can be paired with help that covers it. Here’s what really works.

1. VA loans: 0% down for eligible service members

VA loans, backed by the Department of Veterans Affairs, generally require no down payment and no monthly mortgage insurance for eligible veterans, active-duty members and some surviving spouses. Most borrowers pay a one-time funding fee, which can be financed. See VA loan requirements and try the VA loan calculator.

2. USDA loans: 0% down in eligible areas

USDA guaranteed loans offer no-down-payment mortgages for homes in eligible rural and many suburban areas, for households under the program’s income limits. There’s an upfront guarantee fee and an annual fee. Check maps and income limits on the USDA Rural Development site, and read our USDA loan guide.

3. Down payment assistance (DPA)

Many state housing finance agencies, cities and counties offer grants, forgivable loans or low-interest second mortgages that can cover a down payment and sometimes closing costs. Rules vary a lot: income limits, homebuyer education, and repayment if you sell early. Start with our down payment assistance guide.

4. Gift funds from family

FHA and conventional loans generally allow a family member to gift all or part of the down payment, with a signed gift letter and a paper trail. See gift funds for a down payment.

5. Seller credits to cover closing costs

Sellers can’t pay your down payment, but they can often cover some closing costs within loan limits, which frees up your cash. In slower markets, sellers are more willing. See closing costs explained.

Myth buster“No money down means I need zero cash.” You’ll usually still pay earnest money, an inspection, an appraisal and some closing costs, plus moving costs. Plan for a few thousand dollars at least.

The trade-offs of 0% down

Borrowing the full price means a bigger loan. On a $300,000 home at 7.18%, a 0% down loan costs about $2,032 a month in principal and interest, versus about $1,961 with 3.5% down (before fees and mortgage insurance). You also start with no equity, so if prices dip and you need to sell soon, you might owe more than the home is worth.

ExampleChris, an Army veteran, buys a $300,000 home with a VA loan and $0 down. The 2.15% first-use funding fee ($6,450) is rolled into the loan. Chris uses a seller credit to cover most closing costs and brings about $3,000 for earnest money, inspection and moving.
Fun factFHA’s 3.5% minimum on a $300,000 home is $10,500. Many down payment programs are sized to cover roughly that kind of amount, which is why FHA plus DPA is a common pairing.

How to start

  1. Check your credit and DTI.
  2. See if you qualify for VA or USDA first; they’re the true 0% options.
  3. Search your state housing agency for DPA programs.
  4. Get pre-approved and ask lenders which programs they offer.
  5. Estimate total cash needed with the closing cost calculator.

FAQ

Can first-time buyers get a 0% down mortgage?

Yes, if they qualify for VA or USDA, or if down payment assistance covers the minimum on an FHA or conventional loan.

Do no-down-payment loans have higher rates?

Not necessarily. VA and USDA rates are often competitive. Your rate depends on credit, the market and the lender.

Is it smart to buy with 0% down?

It can be, if the payment fits your budget and you plan to stay a while. Keep an emergency fund for repairs.

Can the seller pay my down payment?

No. Sellers can usually help with closing costs within limits, but not the down payment itself.

Sources: VA home loans; USDA Rural Development; HUD; CFPB; Keys & Coffee calculations. This article is general education, not financial advice. Keys & Coffee is not a lender.

Shivam Kaushik (IMSHIVA)

Written by

Shivam Kaushik· IMSHIVA

Founder & Director, QuibbleTech Solutions Pvt Ltd · Editor, Keys & Coffee

Shivam Kaushik is the founder of QuibbleTech Solutions Pvt Ltd and the editor of Keys & Coffee. He is not a licensed loan officer or financial adviser. Every guide here is written in plain English and checked against official sources such as the CFPB, HUD, Fannie Mae, Freddie Mac and the Federal Reserve. For advice on your own loan, talk to a licensed lender.

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Keys & Coffee is an independent education site. We are not a lender or mortgage broker, we do not take loan applications or payments, and nothing here is financial advice. This site is not affiliated with Axia Home Loans, Axia Financial, LLC, or Planet Home Lending. Rates and rules change often — always confirm details with a licensed loan officer and check any lender on the NMLS Consumer Access site.

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