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No Down Payment Home Loans: Your Real Options in 2026

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Two mortgage types let qualified buyers purchase with nothing down: VA loans for eligible veterans, servicemembers and surviving spouses, and USDA loans for low- and moderate-income buyers in eligible rural and suburban areas. Everyone else gets close through assistance programs that cover the down payment and closing costs. A $0 down loan still leaves cash to find at closing, so the smart plan covers both the loan and the cash around it. Our residential team helps buyers with down payment and closing cost assistance in California, Colorado, Washington and Wyoming.

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Real Simple Housing helps buyers navigate down payment and closing cost assistance in California, Colorado, Washington, and Wyoming.
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TL;DR

  • VA and USDA are the only true zero-down mortgages. VA is for eligible military borrowers. USDA is for buyers under income limits purchasing in eligible areas.
  • Zero down is not zero cash. Closing costs typically run 2% to 5% of the home price, plus earnest money, inspection and moving costs.
  • Assistance programs close the gap for everyone else. They usually pair a low-down-payment FHA or conventional loan with a second loan or grant.
  • The federal government does not hand out down payment grants to individuals. Real help comes through state housing finance agencies, local programs and lenders.
  • Compare Loan Estimates, not headlines. Fees and mortgage insurance decide what a zero-down loan really costs.

Table of Contents

What “no down payment” actually means

A down payment is the part of the price you pay from your own funds instead of borrowing. On a $400,000 home, 20% down is $80,000. A no down payment loan finances 100% of the price, so you borrow the whole amount.

The Consumer Financial Protection Bureau (CFPB), the federal agency that oversees consumer lending, describes two programs built this way. VA loans are for eligible veterans, current servicemembers and surviving spouses, and may have low or zero down payments. USDA loans serve low- and moderate-income borrowers in rural areas and offer zero down payments.

VA and USDA zero-down loan comparison

That is the short list. Programs advertised as “no money down” beyond these two almost always combine a small down payment loan with help from somewhere else. Both routes are legitimate. They work differently, and the difference affects your monthly payment.

VA loans: zero down for those who served

A VA purchase loan is a mortgage from a private lender that is backed by the Department of Veterans Affairs. According to the VA, it can require no down payment when the sales price is not higher than the home’s appraised value. It also requires no private mortgage insurance (PMI) or mortgage insurance premium, and you can borrow up to the conforming loan limit in most areas, with more allowed in some high-cost counties.

What you need:

  • A Certificate of Eligibility (COE), the VA document that confirms your service qualifies.
  • Credit, income and other requirements set by the VA and the lender.
  • A plan to live in the home. VA purchase loans are for primary residences.

What it costs: Most buyers pay a one-time VA funding fee. LendingTree’s 2026 table lists it at 2.15% to 3.30%, with a 41% debt-to-income (DTI) ratio. DTI is your monthly debt payments divided by your gross monthly income. The CFPB notes that VA loans skip monthly mortgage insurance but usually carry that upfront fee at closing.

The fee is often financed into the loan. On a $350,000 loan, a 2.15% fee is $7,525, which raises your balance and your payment slightly. Check your own COE and loan estimate to see whether an exemption applies to you.

USDA loans: zero down for rural and suburban buyers

USDA loans are backed by the U.S. Department of Agriculture and aimed at buyers who earn low to moderate incomes and want a home in an eligible area. Eligible areas are broader than the word “rural” suggests, and many suburban addresses qualify. You confirm a specific address through the USDA’s property eligibility map before you fall in love with a house.

Per LendingTree’s 2026 table, USDA loans carry:

  • 0% down
  • a 1% upfront guarantee fee and a 0.35% annual fee
  • a 41% DTI ratio
  • no set loan limit

The upfront fee is usually rolled into the mortgage, and the annual fee is paid in monthly installments. The CFPB says USDA loans are usually cheaper than FHA loans, though they carry both the upfront fee and ongoing mortgage insurance.

Two details trip people up. First, USDA income limits count total household income, including household members who are not on the loan. Second, self-employed applicants need a two-year history plus a year-to-date profit-and-loss analysis. Gather those documents early.

VA vs. USDA at a glance

VA loan USDA loan
Down payment 0% (price not above appraised value) 0%
Who qualifies Eligible veterans, servicemembers, surviving spouses Low- and moderate-income buyers
Property Primary residence Primary residence in an eligible area
Upfront fee Funding fee, 2.15% to 3.30% 1% guarantee fee
Ongoing mortgage insurance None 0.35% annual fee
DTI (LendingTree, 2026) 41% 41%

Low down payment loans when you don’t qualify for zero

If you are not eligible for VA or USDA, the next best option is a loan with a very small down payment. According to LendingTree’s 2026 figures, the minimums are:

  • Conventional loans: 3% down, a 620 credit score, PMI of 0.58% to 1.86% annually, and a 45% DTI.
  • FHA loans: 3.5% down, a 580 credit score, a 1.75% upfront mortgage insurance premium plus 0.15% to 0.75% annually, and a 43% DTI.

On a $400,000 home, 3% is $12,000 and 3.5% is $14,000. That is the amount an assistance program can cover, which is where the next section comes in.

Down payment assistance: how buyers close the gap

Down payment assistance (DPA) is money from a state housing finance agency, a city, a county or a nonprofit that pays part of your down payment or closing costs. It sits on top of a regular mortgage. It comes in a few forms:

  • Grants: you don’t repay them, usually in exchange for living in the home for a set period.
  • Forgivable second loans: a second loan that disappears after you stay for a number of years.
  • Deferred second loans: a 0% loan you repay when you sell, refinance or pay off the first mortgage.
  • Repayable second loans: you make monthly payments on them.

Real programs vary widely, so read the terms. A county program in Florida, for example, offers income-eligible first-time buyers up to $75,000 as a 0% deferred loan forgiven after 10 or 15 years, with a 2% minimum buyer contribution. A regional housing agency’s classic assistance option offers up to $10,000 as a 0% deferred second mortgage that is not forgivable and comes due on sale or refinance, with a 640 minimum FICO score. Those are Florida examples that show how widely terms differ. Your own state and county set their own rules.

Where to look, and what to avoid

USAGov states that the federal government does not offer grants or free money to individuals to buy a home, and that ads claiming otherwise are often scams. It points buyers to their state housing finance agency instead. In Colorado, for instance, our guide to first-time home buyer programs explains what you may qualify for.

The CFPB also suggests checking state and local programs that target teachers, firefighters and other public-service workers. Ask every program four questions: what is the income limit, is there a first-time buyer rule, how long must you stay, and what happens when you sell.

The cash you still need at closing

This is where many buyers get surprised. The CFPB says closing costs typically run 2% to 5% of the purchase price, not including the down payment. It also suggests setting aside an emergency cushion of three to six months of expenses, plus moving and renovation costs, before you work out how much cash you can use for closing.

Fannie Mae groups closing costs into four buckets:

  1. Lender and origination fees, including the appraisal.
  2. Settlement and title fees.
  3. Third-party fees, such as homeowners insurance prepaids, initial escrow and inspection.
  4. Taxes and government fees, such as property tax prepaids and recording fees.

It also notes that earnest money deposits, the good-faith deposit you make when your offer is accepted, range from 1% to 3% of the price and are typically credited toward your costs at closing.

A worked example

Take a $400,000 home bought with a USDA loan:

Item Estimate
Down payment $0
Closing costs at 2% to 5% (CFPB range) $8,000 to $20,000
Earnest money at 1% to 3% (Fannie Mae range, credited at closing) $4,000 to $12,000
USDA upfront fee at 1% $4,000, usually rolled into the loan

The earnest money is part of what you pay at closing, not on top of it. So the real cash question is closing costs plus a cushion. Sellers can sometimes contribute toward your costs, and some programs let eligible costs be financed, but neither is guaranteed. Ask for a Loan Estimate, the standard three-page form every lender must give you, and read the “cash to close” line.

This is where assistance matters most. Closing-cost help can turn a $0 down loan into a purchase you can actually afford.

Can you borrow the down payment?

The CFPB says that in some cases you can borrow money for a down payment, but it warns that this raises your overall debt and monthly payments. Alternatives it lists include:

  • A family gift with a signed gift statement.
  • Up to $10,000 from an IRA for a first home, where the early-withdrawal penalty may be waived. Talk to a tax adviser before you withdraw.
  • Nonprofit or government second mortgages on special terms.

Lenders check where every dollar came from, so document it before you apply.

How to buy a home with no down payment: step by step

  1. Check your eligibility. Military service points you to VA. Household income and the property’s location point to USDA. If neither fits, look at 3% and 3.5% down loans with assistance.
  2. Pull your credit and your DTI. Programs differ, but the figures above (580 to 620 on credit, 41% to 45% DTI) show where the lines sit.
  3. Find the assistance for your state and county. Start with your state housing finance agency. Our team can help you match programs to your situation through our residential service.
  4. Get preapproved, and compare Loan Estimates. The CFPB recommends comparing official Loan Estimates before you decide, and says that for people who qualify, special loan programs can be more affordable than conventional or FHA loans.
  5. Budget for the cash. Use the 2% to 5% closing-cost range, add earnest money and moving costs, and keep your emergency cushion.
  6. Shop only where the loan works. For USDA, confirm the address is eligible. For VA, the price must stay within the appraised value for the zero-down terms to hold.
  7. Keep reserves after closing. A failed water heater in month two is a bigger problem if you closed with nothing left.

For first-time questions on offers, inspections and timelines, see our home buying FAQ.

Our view: help with the cash, not just the loan

Most people searching for “no down payment” are really asking whether they can afford to buy at all. The loan type is only half of that answer.

We built our brokerage around the other half. We offer down payment and closing cost assistance programs, and we keep our listing costs low, because every dollar saved on a transaction is a dollar a buyer or seller keeps. We work with first-time buyers, investors and trustees across California, Colorado, Washington and Wyoming, and the question is the same each time: what will it take to get this done without a scramble?

Our advice is to start with your cash-to-close number, not the interest rate. Work out what you can bring, find the assistance that fits, then choose the loan. We guide that sequence personally, because a program you didn’t hear about costs you more than any fee.

Justin

Where we can help

If you are buying in California, Colorado, Washington or Wyoming, our residential team offers buying and selling services, down payment assistance programs and low-fee listings. For buyers moving into California, our relocation program page covers closing costs assistance, home repair funding and a new home warranty program.

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Investors can see our investor services, and trustees handling an estate can see our trust services. Sellers who want a low-cost listing can start on our home page.

FAQ

Can anyone get a home loan with no down payment?

No. Zero-down mortgages are limited to VA loans for eligible veterans, servicemembers and surviving spouses, and USDA loans for low- and moderate-income buyers in eligible areas. Other buyers can reach a very low cash outlay by combining a 3% or 3.5% down loan with assistance.

Is a no down payment loan more expensive?

Often the monthly cost is higher, because you borrow more, and each program has its own fee. VA uses an upfront funding fee of 2.15% to 3.30% in LendingTree’s 2026 table, and USDA uses a 1% upfront and 0.35% annual fee. Compare official Loan Estimates for the full picture.

Do I need money at closing with a zero down mortgage?

Yes. Closing costs typically run 2% to 5% of the price, and you may also pay earnest money, inspection and moving costs. Seller contributions, lender credits, gifts or assistance programs can reduce the total, but they are not guaranteed.

Does the government give grants for a down payment?

Not directly to individuals. USAGov says the federal government does not offer free money to buy a home and warns that such ads are often scams. State housing finance agencies and local programs are the legitimate source of assistance.

Sources