You can buy a house without a down payment, but only through specific loan programs — and they come with real trade-offs you need to understand before committing.

The most common path is a VA loan if you are a veteran or active-duty service member. VA loans require zero down payment and no mortgage insurance, which saves you thousands over the life of the loan. The catch: you must meet military service requirements, and the lender will verify your may be able to access through a Certificate of may be able to access from the Department of Veterans Affairs.

If you are not military, a USDA loan is the next option. These are for rural and some suburban properties and also require no down payment. You must meet income limits (which vary by county) and the property must be in an may be able to access area. USDA loans do charge an upfront may provide fee and annual mortgage insurance, so your monthly payment will be higher than a conventional loan.

A third option is a conventional loan with 0% down, offered by some lenders. These are rare and come with strict requirements: excellent credit (usually 680 or higher), stable income history, and significant cash reserves. You will pay private mortgage insurance (PMI) until you build equity, which adds $100 to $300+ per month to your payment depending on the loan size.

Key Takeaways

  • VA loans require zero down payment and no mortgage insurance if you served in the military or are currently active duty.
  • USDA loans offer zero down payment for properties in rural or may be able to access suburban areas, but charge mortgage insurance and an upfront fee.
  • Conventional 0% down loans exist but require excellent credit, stable income, and cash reserves, plus you will pay private mortgage insurance monthly.
  • No-down-payment loans cost more over time through higher interest rates, mortgage insurance, or upfront fees compared to loans with 10% or 20% down.

How VA loans work if you served in the military

A VA loan is backed by the Department of Veterans Affairs, which means the government guarantees part of the loan to the lender. This may provide is what allows lenders to offer zero down payment without taking on extra risk. You do not need to be a current homeowner or have perfect credit — many VA borrowers have credit scores in the 620 range, though most lenders prefer 640 or higher.

To use a VA loan, you need a Certificate of may be able to access, 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, the lender will verify your military service and calculate your entitlement — the amount the VA will may provide. Most borrowers have full entitlement, which means the VA will back the entire loan up to the county loan limit (these limits vary by location and change yearly).

VA loans do charge a one-time funding fee, typically 2.3% of the loan amount for first-time users, though this can be rolled into the loan itself. Disabled veterans may be exempt from this fee. There is no mortgage insurance, which is a major advantage over other zero-down options.

USDA loans for rural and may be able to access suburban areas

USDA loans are designed to help people buy homes in areas the government wants to develop. The property must be in an may be able to access rural or suburban area — you can check this on the USDA website by entering the address. The loan itself comes from a private lender, but the USDA guarantees it, similar to how VA loans work.

Income limits apply and vary significantly by county and family size. A family of four in one county might have a $90,000 limit while the same family in another county has a $110,000 limit. You can check your county's limits on the USDA Rural Development website. If your income exceeds the limit, you do not meet the requirement, and no exceptions are made.

USDA loans charge an upfront may provide fee (around 1% to 3.5% of the loan amount) and an annual mortgage insurance premium (around 0.35% to 0.8% of the loan balance per year). These costs are built into your monthly payment, making USDA loans more expensive month-to-month than VA loans, but they remain cheaper than conventional loans with PMI if you have lower credit or less cash on hand.

Conventional loans with zero down and what they actually cost

Some conventional lenders will write a loan for 0% down, but the requirements are strict. You typically need a credit score of 680 or higher (many lenders want 700+), a debt-to-income ratio below 43%, and documented cash reserves equal to three to six months of mortgage payments. If you have any late payments in the last two years, most lenders will decline you.

The real cost is private mortgage insurance. PMI protects the lender if you default, and you pay for it. On a $300,000 loan with 0% down, PMI might run $150 to $300 per month. You will pay PMI until you reach 20% equity in the home, which takes years. If your home appreciates, you can request to remove PMI sooner, but you have to ask — it does not happen automatically.

Interest rates on 0% down conventional loans are also typically 0.5% to 1% higher than rates on loans with 10% or 20% down, because the lender is taking on more risk. Over a 30-year loan, that rate difference costs tens of thousands of dollars in extra interest.

The real cost of buying with no money down

Comparing a zero-down loan to one with 10% or 20% down shows why down payments matter. On a $300,000 home, a 10% down payment is $30,000. If you have that money, a conventional loan with 10% down will have a lower interest rate, no PMI, and a lower monthly payment than a 0% down loan. The $30,000 you put down reduces what you borrow, so you pay less interest overall.

With zero down, you are borrowing the full $300,000. Even if your interest rate is only 0.5% higher, that adds up to roughly $40,000 to $50,000 in extra interest over 30 years. Add in PMI ($150 to $300 per month for years), and you are paying $60,000 to $100,000 more than if you had saved a down payment.

The exception is VA loans, which have no PMI and often have competitive interest rates. If you are may be able to access for a VA loan, the zero-down option is genuinely cost-effective compared to other paths.

What you still need to pay for without a down payment

Zero down does not mean zero costs at closing. You will still owe closing costs, which typically run 2% to 5% of the loan amount. On a $300,000 loan, that is $6,000 to $15,000. These cover appraisal, title search, title insurance, attorney fees, and lender fees.

Some lenders will roll closing costs into the loan, which means you do not pay them upfront but you pay interest on them for 30 years. Others require you to pay them out of pocket. Ask your lender upfront what their policy is.

You will also need to pay for a home inspection (typically $300 to $500), which is separate from the appraisal and is your responsibility, not the lender's. Many buyers also pay for a survey and pest inspection, though these are not required by lenders.

When a down payment is worth saving for

If you are not may be able to access for a VA or USDA loan and you have time, saving a down payment often makes financial sense. Even 5% down eliminates PMI on some conventional loans and lowers your interest rate. At 10% down, you get better rates and no PMI on most products. At 20% down, you have the best rates and no PMI at all.

The trade-off is time. If you need to buy soon and you do not have savings, a zero-down option may be your only path. But if you can wait 12 to 24 months and save $15,000 to $30,000, your long-term costs will be significantly lower. A financial advisor or mortgage lender can run the numbers for your specific situation.

Frequently Asked Questions

Do I need perfect credit to get a zero-down loan?

No. VA loans often go to borrowers with credit scores in the 620 to 640 range. USDA loans typically want 640 or higher. Conventional 0% down loans usually require 680+. The lower your credit, the higher your interest rate will be, which costs you more over time.

Can I use a zero-down loan to buy a second home or investment property?

VA and USDA loans are for primary residences only. You cannot use them to buy a rental property or vacation home. Conventional 0% down loans are also typically limited to primary residences, though some lenders offer them for second homes with stricter requirements.

What happens if I lose my job after I close on a zero-down loan?

The lender does not care about your employment status after closing — you own the home. But if you cannot make payments, you risk foreclosure. This is why lenders check your income and employment history before closing. Having cash reserves helps you weather a job loss without defaulting.

Can I remove PMI early if my home appreciates?

Yes, but you have to request it. Once you reach 20% equity (through appreciation or extra payments), contact your lender and ask to remove PMI. Some lenders require a new appraisal to prove the home's value. PMI does not come off automatically, so many borrowers miss this step and pay it longer than necessary.

Is a zero-down loan a bad idea?

It depends on your situation. For VA borrowers, it is often the best option available. For others, it costs more over time than saving a down payment, but if you need to buy now and have no other choice, it is better than renting and waiting indefinitely. Run the numbers with a lender to see the actual cost difference for your loan amount and credit profile.