Are you looking to buy a home, yet don’t have enough extra cash lying around to provide a down payment?


Don’t stress, we’ve got you covered!


Many prospective home buyers aren’t aware that there are mortgage programs out there, which allow you to purchase homes without down payments. Let’s dig in to the different types.




The USDA Loan is a loan created by the United States Department of Agriculture in order to assist in rural development. It’s the perfect solution for low and middle income families. When you compare USDA loans to FHA loans for example, you find that the insurance premium on the mortgage is far lower!


Typically, metropolitan areas are the exception when it comes to this loan, though you can find suburban and rural areas all over the map for eligibility.



Navy Federal Credit Union

Members of the Navy Federal Credit Union can qualify for no-down-payment mortgages. Thanks to HomeBuyer’s Choice, you can get ahold of both conforming and jumbo loans, conforming capped at $484,350 and jumbo capped at almost one million.





VA Loans

Veterans have the ability to qualify for VA mortgages, which offer complete financing without a down payment. One of the great qualities when it comes to VA loans is the fact that they don’t require mortgage insurance. This can help you to save thousands every year.


Do keep in mind that though these loans are some of the least expensive in terms of mortgage programs, there are specific fees that you should be aware of, including the VA funding fee. To keep the program running, lenders will charge this fee rather than asking for mortgage insurance. The fee ranges from 1% to 2.15% and will depend on if you decide to put a small down payment down or not.


Check your VA loan eligibility here.



FHA Loans

If you are able to put a small down payment down, FHA loans can be an excellent option! Mortgage requirements were pretty outrageous before the FHA came around in 1934.This program allowed Americans with okay credit and little upfront money to take out conventional loans.


To qualify for an FHA loan, you must have a credit score of at least 500. If you lie somewhere between 500 and 580, your down payment will be 10%. If you are above 580, that down payment falls down to 3.5%.


You can choose between a few different fixed-rate terms depending on how much you would like to pay monthly. The shorter the term, the less interest you will pay in the long run.



What It Comes Down To

The one large advantage of a zero-down payment loan is the fact that you can purchase a home without ever having to put money down. Like everything good, there are disadvantages. For starters, you won’t have any home equity built up, meaning you won’t be able to take out home equity loans for expenses and repairs.


You’ll also be paying far more over time in interest, meaning you’ll end up spending more money in the long run. Understanding your options is important when purchasing a home. The most important thing is knowing whether or not you can afford your mortgage payments from month to month.


Do you have experience buying a home without a down payment? How has it worked out for you? Let us know in the comments!