How to Buy a House With No Money Down

Buying a house with no money down is possible in 2026 through three main paths: VA loans for military service, USDA loans for rural and suburban areas, and physician loans for medical professionals. Down payment assistance grants can cover the remaining closing costs. Plan for $3,000 to $8,000 in earnest money, inspection, and post-close reserves even on a 100 percent financed loan.

The Three Zero-Down Loan Programs

VA Loan (Department of Veterans Affairs)

Available to veterans, active-duty service members, National Guard, Reserves with 6-plus years, and qualifying surviving spouses. Zero down, no PMI, no minimum credit score (lender overlays usually 580-plus). The only required fee is a one-time funding fee of 1.25 to 3.3 percent of the loan, which can be financed into the loan or waived for veterans with service-connected disabilities.

VA loan limits match conforming loan limits in most counties ($766,550 in 2026, higher in high-cost areas). The VA backs the loan, the lender funds it. Full eligibility details at https://www.va.gov/housing-assistance/home-loans/.

Full process: how to qualify for a VA loan.

USDA Loan (Single-Family Housing Guaranteed Loan)

Available to buyers purchasing a primary residence in a USDA-eligible area. The eligibility map covers most rural areas and many suburban areas, including towns under 35,000 in population and some larger areas that are USDA-designated. Income limits apply: household income cannot exceed 115 percent of the area median income.

Zero down, no traditional PMI. USDA charges a 1 percent upfront guarantee fee (financeable into the loan) and 0.35 percent annual fee paid monthly for the life of the loan.

Use the USDA eligibility map at usda.gov/income-eligibility before you apply. Many buyers are surprised to find their target area qualifies.

Physician (Doctor) Loans

Offered by select banks and credit unions to MDs, DOs, dentists, podiatrists, pharmacists, and some other licensed medical professionals. Often allow 100 percent financing up to $1 million or more, with no PMI, and forgiving treatment of student loan debt (often counting income-driven repayment instead of fully amortizing payment).

Not government-backed. Each lender has its own underwriting and eligibility list. Available through Bank of America, Truist, Citizens, BMO, and many regional banks.

What About Conventional 3 Percent Down?

If you do not qualify for VA, USDA, or physician loans, you can still get close to zero down. Conventional 97 loans (Fannie Mae and Freddie Mac) require 3 percent down. FHA loans require 3.5 percent down with a 580 credit score. Combine either with down payment assistance and you can close with very little cash from your own savings.

Comparison table for a $300,000 home:

| Loan type | Down payment | Mortgage insurance | Funding fee | Cash needed (with DPA) | |---|---|---|---|---| | VA | $0 | None | 2.15 percent ($6,450) | $3,000 to $5,000 | | USDA | $0 | 0.35 percent annual | 1 percent ($3,000) | $3,000 to $5,000 | | Conventional 97 | $9,000 | 0.5 to 1 percent annual | None | $4,000 to $8,000 with DPA | | FHA | $10,500 | 0.55 percent annual + 1.75 upfront | None | $4,000 to $8,000 with DPA |

Step 1: Down Payment Assistance

Every state has down payment assistance programs run by the state housing finance agency. Most cities have local programs too. Common structures:

• Grant. Free money for down payment or closing costs. Usually $5,000 to $15,000, often requires 3 to 5 years of owner occupancy. Most generous form.
• Forgivable second mortgage. Recorded as a second lien at 0 percent interest. Forgiven if you stay in the home 5 to 10 years. If you sell or refinance early, you pay it back.
• Deferred second mortgage. Recorded as a second lien at 0 to 3 percent interest. No payments due. Repaid at sale, refinance, or end of the first mortgage term.

Search HUD's database at https://www.hud.gov/ for local programs. Most require:

• First-time buyer status (no ownership in past 3 years in most programs)
• Income below 80 to 120 percent of area median
• Credit score 620 to 680
• Completion of HUD-approved homebuyer education course (8 hours, $50 to $100, online options available)
• Primary residence only

Step 2: Seller Concessions

Sellers can legally contribute to your closing costs. The maximum varies by loan type:

| Loan | Maximum seller concession | |---|---| | Conventional, owner-occupied, less than 10 percent down | 3 percent of purchase price | | Conventional, owner-occupied, 10 to 25 percent down | 6 percent of purchase price | | FHA | 6 percent of purchase price | | VA | 4 percent of purchase price plus all standard buyer closing costs | | USDA | 6 percent of purchase price |

On a $300,000 VA purchase, the seller can contribute $12,000 plus pay all buyer-side closing costs (title, recording, attorney). That can completely eliminate your cash to close.

In buyer-friendly markets (where homes sit), sellers regularly agree to concessions. In seller-friendly markets, you may have to offer above asking price to get concessions, which slightly defeats the purpose. Run the math: a $310,000 purchase with $10,000 in seller credits is equivalent to a $300,000 purchase with no credits on the monthly payment, since the credits offset cash but increase the loan.

Step 3: Get Pre-Approved With a Specialist Lender

Not every lender handles VA, USDA, or DPA loans well. Look for lenders with high volume in your target program:

• VA specialists. Veterans United, Navy Federal, USAA, PenFed. Loan officers know the entitlement rules, certificate of eligibility process, and VA appraisal quirks.
• USDA specialists. Caliber, LoanDepot, local credit unions. USDA underwriting is slower than conventional, so file efficiency matters.
• DPA specialists. Your state housing finance agency publishes a list of participating lenders. Use one of them, since they know the second-lien stacking process.

Full process: how to get pre-approved for a mortgage and how to choose a mortgage lender.

Step 4: The Cash You Still Need

Even with a 100 percent financed loan and full seller concessions, you will need some cash. Budget for:

• Earnest money deposit. Usually 1 percent of purchase price ($3,000 on a $300,000 home), refundable if you walk per contract.
• Home inspection. $400 to $800, paid up front.
• VA or USDA appraisal. $500 to $1,000, often paid up front.
• Cash reserves post-close. Most lenders want to see 1 to 3 months of mortgage payments in a bank account after closing.
• Moving costs. $500 to $5,000 depending on distance and volume.

Realistic out-of-pocket for a $300,000 zero-down purchase: $3,000 to $8,000, before reserves.

Step 5: Property Restrictions

Zero-down government loans require the property to meet minimum standards:

• VA Minimum Property Requirements (MPR). Property must be safe, structurally sound, and sanitary. No exposed wiring, peeling lead paint on pre-1978 homes, missing handrails, or non-functional HVAC, plumbing, or roof. The VA appraiser inspects for these.
• USDA Property Standards. Similar to VA, plus the property must be a primary residence and meet HUD Handbook 4000.1 standards. No in-ground pools in some states (rules vary), no income-producing land use.
• HUD home limits on FHA financing. Some condos and manufactured homes do not qualify.

If the property fails inspection, the seller must repair or the deal must be re-negotiated. In a hot market, sellers may walk rather than fix issues. Your agent should screen listings for obvious deal-killers.

When Zero-Down Is the Wrong Move

• You have no cash reserves and an income that depends on a single job
• You plan to move within 3 years (selling costs are 8 to 10 percent of value; you will owe money at closing)
• Local home prices are flat or falling, which leaves you underwater immediately
• Your credit score is below the program minimums and the higher rate erases the benefit

If any of these apply, save for at least 3 percent down through a conventional loan or 3.5 percent through FHA. The discipline of saving also builds the reserves you will need post-close.

What to Do Next

If you are eligible for a VA loan, that is almost always the cheapest path. Start with how to qualify for a VA loan.

If you are not military, check USDA eligibility for your target area (usda.gov/income-eligibility). If you do not qualify for either, see how to apply for an FHA loan plus the first-time buyer hub for DPA programs in your state.

Run the numbers on the mortgage payment calculator including PMI or funding fee to see your real monthly payment.

Citations

• VA Home Loans, U.S. Department of Veterans Affairs: https://www.va.gov/housing-assistance/home-loans/
• HUD, homebuyer programs and DPA database: https://www.hud.gov/
• USDA Single Family Housing Guaranteed Loan Program: https://www.hud.gov/
• Consumer Financial Protection Bureau, first-time buyer guide: https://www.consumerfinance.gov/