For many Americans, homeownership feels out of reach due to one major barrier: the down payment. Traditional mortgages typically require 10–20% down, which can amount to tens of thousands of dollars. However, buying a home with no money down is possible — thanks to government-backed loans, grants, and creative financing strategies.

This article explores the best ways to buy a house with zero down payment in the US, the pros and cons of no-down-payment programs, and answers to frequently asked questions.

What Does “No Money Down” Mean?





“No money down” means you can purchase a home without making a traditional down payment. However, it doesn’t always mean “free.” Buyers still need to cover closing costs, insurance, and moving expenses — unless these are negotiated into the loan or covered by the seller.

Who Can Buy a House with No Down Payment?

No-down-payment options are typically available to:

  • First-time homebuyers
  • Veterans and active military personnel
  • Low- to moderate-income buyers
  • Rural area residents

Top Programs to Buy a House with No Money Down

1. VA Loans (Veterans Affairs Loans)

Best for: Veterans, active-duty service members, and eligible spouses

  • Down payment: $0 required
  • Credit score: Usually 620+
  • Backed by: U.S. Department of Veterans Affairs
  • Other features:
    • No private mortgage insurance (PMI)
    • Competitive interest rates
    • Limited closing costs

🔗 Learn more: www.va.gov/housing-assistance/home-loans

2. USDA Loans

Best for: Buyers in eligible rural or suburban areas

  • Down payment: $0 required
  • Income limits: Applies (varies by location and household size)
  • Credit score: 640+ recommended
  • Other features:
    • Low interest rates
    • Government-backed by U.S. Department of Agriculture

🔗 Learn more: www.rd.usda.gov/programs-services/single-family-housing-guaranteed-loan-program

3. Down Payment Assistance (DPA) Programs

Best for: First-time or low-income buyers

Thousands of city, county, and state agencies offer grants, forgivable loans, or second mortgages to help cover the down payment and/or closing costs.

  • Down payment: Covered by assistance
  • Income and location-based eligibility
  • Often used with FHA or conventional loans

🔗 Search tools: downpaymentresource.com

4. Lease-to-Own Programs

Best for: Renters who want to become homeowners

Lease-to-own agreements allow you to rent a home with the option to buy later. A portion of rent may go toward the eventual down payment.

  • Down payment: Often $0 upfront
  • Pros: Test the home before buying
  • Cons: Higher monthly rent, non-refundable option fees

5. Seller Financing or “Owner Carry”Best for: Buyers with nontraditional income or poor credit

In seller financing, the homeowner acts as the lender, allowing the buyer to make payments over time.

  • Down payment: Often negotiable (can be $0)
  • Pros: Flexible terms
  • Cons: Higher interest, fewer protections for buyer

Pros and Cons of Buying with No Down Payment

✅ Pros

  • Faster path to homeownership
  • Preserve savings for emergencies or renovations
  • Take advantage of low interest rates sooner

❌ Cons

  • Higher monthly mortgage payments
  • Higher loan amount = more interest paid over time
  • May need to pay PMI (except with VA loans)
  • Less equity initially, making it harder to refinance or sell

Tips to Improve Your Chances

  1. Check your credit score and improve it if needed.
  2. Get preapproved for a loan to show sellers you’re serious.
  3. Compare multiple lenders for best rates and terms.
  4. Research local DPA programs or nonprofit assistance.
  5. Negotiate with sellers to cover closing costs (seller concessions).

FAQs About Buying a Home with No Money Down

Q1: Can I really buy a home with zero down?

Yes. If you qualify for a VA or USDA loan or combine down payment assistance with a low down payment loan (like FHA), you can buy a home with no or very little money upfront.

Q2: Do I need perfect credit for a no-down loan?

No. While better credit gets better rates, some programs accept scores as low as 580–640.

Q3: What are closing costs, and are they included?

Closing costs typically range from 2–5% of the loan amount and include fees for appraisal, title, and taxes. These are not covered in “no money down” loans but may be paid by the seller or assistance programs.

Q4: Can first-time homebuyers get help?

Yes! Many state-sponsored programs and nonprofit groups offer grants and forgivable loans to first-time buyers, especially in underserved areas.

Q5: What if I don’t qualify for VA or USDA loans?

Consider FHA loans with DPA programs or explore conventional loans with 3% down and negotiate to cover the down payment with assistance or lender credits.

References

Final Thoughts

Buying a house with no money down is absolutely possible — but it requires research, preparation, and knowing where to look. Government-backed loans like VA and USDA, down payment assistance, and creative financing are all excellent options.

If you’re serious about owning a home but don’t have the savings for a big down payment, now is a great time to explore your options and work with a qualified lender or housing counselor.