Getting approved for a home loan with no down payment at all can seem like a dream come true for home buyers who are short on savings. However, it takes some extra effort and requirements to qualify for a true 0% down loan. In this post, we’ll explore the options available and what it takes to buy a house with zero down.
FHA Loans with 3.5% Down
One of the most common options for low down payment home loans is an FHA (Federal Housing Administration) loan, which only requires a minimum investment of 3.5% of the purchase price. However, with closing costs average 2-5% of the home’s price, buyers still need some cash for the transaction.
VA Loans with 0% Down (for eligible veterans)
If you’ve served in the military, you may qualify for a VA (Veterans Affairs) home loan, which provides the most lenient terms with potentially 0% down. However, you’ll still pay an upfront funding fee instead of a down payment.
USDA Loans with 0% Down (for rural areas)
Another no-money-down option is a USDA (United States Department of Agriculture) home loan, targeted at low-to-moderate income buyers in rural communities or small towns. Strong credit is a must though.
Conventional Loans with Down Payment Assistance
Some state and local programs provide grants or secondary financing to cover down payments for qualifying low-to-moderate income buyers going conventional. Credit scores of 620+ are usually required.
The Bottom Line
While technically possible to buy a house with absolutely zero cash out of pocket, it requires meeting specific eligibility criteria or programs. The strongest candidates have good credit and financial stability beyond just needing no money down. With planning and the right loan, it can be achievable for eligible home buyers.