How to Buy a House With No Money Down in 2026

Updated April 16, 2026

How to Buy a House With No Money Down in 2026

True Zero-Down Mortgage Programs

Two major loan programs offer genuine 100% financing with no down payment required. VA loans are available to active-duty military, veterans, and eligible surviving spouses, offering zero down, no PMI, and competitive interest rates. USDA loans serve buyers in eligible rural and suburban areas (which includes many communities within 30 minutes of major cities) with zero down and a small guarantee fee. Both programs have no maximum purchase price limit based on down payment - you only need to qualify based on income and creditworthiness. These two programs account for the vast majority of no-money-down home purchases in the United States.

Down Payment Assistance Programs

Every state has a housing finance agency that offers down payment assistance (DPA) programs, and many cities and counties have their own as well. These programs typically provide 3% to 5% of the purchase price as a grant, forgivable loan, or low-interest second mortgage. Some programs are limited to first-time homebuyers, while others are available to anyone below certain income thresholds. The National Homebuyers Fund, Chenoa Fund, and various state-specific programs can effectively create a zero-down scenario when paired with FHA or conventional loans that require minimal down payments. Eligibility requirements vary, so check with a local lender who participates in these programs.

Creative Strategies for Covering Upfront Costs

Even with a no-down-payment loan, you still need to cover closing costs, which typically run 2% to 4% of the purchase price. Seller concessions allow the seller to pay some or all of your closing costs - in buyer-friendly markets, this is a common negotiation point. Lender credits trade a slightly higher interest rate for cash toward closing costs, potentially eliminating any upfront out-of-pocket expense. Gift funds from family members can cover the remaining costs on most loan programs. Some employers also offer homebuyer assistance as a benefit, especially in high-cost areas where they struggle to attract talent.

VA Loan: The Best Zero-Down Option

If you are eligible, a VA loan is by far the most advantageous zero-down option. There is no monthly mortgage insurance premium of any kind, which can save $100 to $300 per month compared to FHA or conventional alternatives. VA loan rates are typically 0.25% to 0.5% lower than comparable conventional rates. The VA funding fee (1.25% to 3.3% of the loan amount) can be financed into the loan, and disabled veterans are exempt from the fee entirely. VA loans also have more flexible credit requirements and no maximum DTI ratio, though most lenders cap it around 50% to 55%.

USDA Loan: Zero Down for Suburban and Rural Areas

USDA loans are underutilized because many buyers assume they are only for farmland, but eligible areas include suburbs and small towns across the country. You can check property eligibility on the USDA's online map tool at eligibility.sc.egov.usda.gov. Income limits apply - generally your household income cannot exceed 115% of the area median income. The guarantee fee structure is more affordable than FHA: a 1.0% upfront fee plus a 0.35% annual fee, both lower than FHA's equivalents. USDA loans require a 640+ credit score at most lenders and work only for primary residences, but for eligible buyers they offer an exceptional deal.

What Zero Down Really Costs Long Term

Buying with no money down means financing 100% of the purchase price, which increases your monthly payment and total interest paid over the life of the loan. On a $300,000 home, the difference between 0% and 10% down is about $30,000 in loan balance, adding roughly $190 per month at 6.5%. You also start with no equity cushion, meaning any decline in home values could leave you underwater. However, the opportunity cost works both ways - the money you would have used for a down payment could earn returns if invested elsewhere. For many buyers, getting into a home sooner and starting to build equity through price appreciation and principal paydown outweighs the higher carrying cost.

Ready to explore no-money-down options? Compare VA, USDA, and low-down-payment rates on Rate Direct to find the most affordable path to homeownership.

Today's mortgage rates

Conventional

5.625% (5.754% APR)

FHA

5.250% (5.370% APR)

5.125% (5.239% APR)

Conventional: 80% LTV, 780 FICO. FHA: 96.5% LTV, 680 FICO. VA: 100% LTV, 700 FICO. 30-year fixed, primary residence. Your rate may vary.

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