No Down Payment Mortgage: VA, USDA, and Low-Down Options

A no down payment mortgage lets you finance 100% of the home price — but only a handful of programs actually make that possible. The two broadest are VA loans, available to eligible active-duty service members, veterans, and certain surviving spouses, and USDA loans, designed for homes in qualifying rural and suburban areas. Both require no down payment and carry no monthly private mortgage insurance. Beyond those, physician mortgages and the nonprofit NACA program provide low- or zero-down paths for narrower audiences. For most other buyers, the closest route to zero is an 80/10/10 piggyback — a first mortgage plus a small second loan that lets you put just 10% cash down while skipping PMI. Below, we break down every major option, who qualifies, and the trade-offs you should weigh before borrowing the full purchase price.

Key Takeaways

• Only VA and USDA loans offer true $0-down financing to broad audiences.
• FHA loans still require a minimum 3.5% down payment — they are not zero-down.
• VA loans replace PMI with a one-time funding fee that can be financed into the loan.
• USDA loans are limited to eligible rural and suburban areas and carry household income caps.
• Zero down means you build equity more slowly and may owe more than your home is worth if prices dip.

Can You Buy a House With No Down Payment?

Yes — if you qualify for one of the programs below. The federal government backs two zero-down mortgage types: VA loans and USDA loans. A small number of private or nonprofit alternatives, including physician mortgages and NACA loans, also allow $0 down under specific conditions.

It is a common misconception that FHA loans require no money down. In reality, FHA borrowers must put down at least 3.5% with a credit score of 580 or higher. And conventional loans from Fannie Mae or Freddie Mac typically start at 3% down through programs like HomeReady or Home Possible. Those are low-down options, not zero-down.

To compare mortgage loan types side by side, start with the table below.

$0 Down Programs at a Glance

VA Loans — $0 Down for Eligible Service Members

VA loans are backed by the U.S. Department of Veterans Affairs and remain one of the most powerful no down payment mortgage options available. Eligible borrowers include active-duty service members, veterans with qualifying discharge status, National Guard and Reserve members with sufficient service, and certain surviving spouses.

Key benefits:

• No down payment required on any loan amount for borrowers with full entitlement.
• No monthly PMI — ever.
• Competitive interest rates, often below conventional averages tracked by the Freddie Mac Primary Mortgage Market Survey.
• Sellers can contribute toward the buyer's closing costs.

To apply, you need a Certificate of Eligibility (COE), which you can request through your lender or directly from the VA. There is no official minimum credit score set by the VA, though most lenders require at least 620. If your credit is lower, explore no-down options with lower credit to understand your alternatives.

The VA Funding Fee (What Replaces PMI)

Instead of monthly mortgage insurance, VA loans charge a one-time funding fee that ranges from 1.25% to 3.3% of the loan amount. The exact percentage depends on your service category, whether it is your first VA loan or a subsequent use, and how much you put down. For a first-time VA borrower putting $0 down, the fee is 2.15% for regular military.

The funding fee can be rolled into the loan balance so you do not need to pay it out of pocket at closing. Veterans with a service-connected disability are exempt from the fee entirely.

Understanding the difference between PMI vs. VA funding fee matters: the funding fee is a one-time cost, whereas PMI on a conventional loan is an ongoing monthly charge that typically runs 0.5% to 1.5% of the loan amount per year.

USDA Loans — $0 Down in Eligible Areas

The USDA Section 502 Guaranteed Loan Program is a no down payment mortgage designed to promote homeownership in less densely populated parts of the country. Despite the name, "rural" covers many suburban areas — roughly 97% of U.S. land qualifies.

Requirements:

• The home must be in a USDA-eligible area.
• Your household income cannot exceed 115% of the area median income for your county.
• The home must be your primary residence.
• Most lenders look for a credit score of 640 or higher, though the USDA does not set a hard minimum.

USDA loans carry an upfront guarantee fee of 1% and an annual fee of 0.35%, which is split into monthly payments. Those costs are lower than FHA mortgage insurance premiums, making USDA an attractive zero-down alternative in eligible locations.

How to Check USDA Property Eligibility

Use the USDA's online eligibility map to look up any property address. The tool also lets you check household income limits for your area. Run both checks early — you may be surprised by how many suburban neighborhoods qualify.

Physician Loans — Low or $0 Down for Doctors, Dentists, and Some Other Professionals

A physician mortgage — also called a doctor loan — is a specialty product offered by portfolio lenders, meaning the bank keeps the loan on its own books rather than selling it to Fannie Mae or Freddie Mac. These loans are designed for medical professionals who carry high student debt but have strong earning potential.

Typical features:

• Down payments from 0% to 5%, depending on the lender and loan amount.
• No PMI, even at high loan-to-value ratios.
• Student loan debt may be excluded or weighted differently during qualification.
• Eligibility usually covers MDs, DOs, DDSs, and sometimes other licensed professionals like veterinarians or attorneys.

Physician loans are not standardized the way VA or USDA loans are. Rates, terms, and eligibility criteria vary by lender, so request quotes from at least two or three institutions to compare.

NACA — Nonprofit $0-Down Mortgages

The Neighborhood Assistance Corporation of America (NACA) is a nonprofit that offers a no down payment mortgage with no closing costs, no PMI, and a below-market fixed interest rate. NACA is not a government program — it partners with participating lenders who fund the loans.

What to expect:

• $0 down payment and $0 closing costs.
• No PMI or mortgage insurance of any kind.
• Below-market interest rates, with the option of buying down the rate further using NACA grants.
• You must complete a homebuyer workshop and one-on-one counseling sessions, which can take several months.
• The home must be your primary residence, and you must become a NACA member.

NACA's process is more involved and slower than a traditional mortgage. The counseling requirement is extensive, and the program may not be available in all markets. For buyers willing to invest the time, it can be one of the most affordable paths to homeownership — but plan for a longer timeline.

80/10/10 Piggyback — Low, Not Zero

If you do not qualify for a VA, USDA, physician, or NACA loan, the 80/10/10 piggyback structure is the next closest thing to zero down. Here is how it works:

• 80% first mortgage (conventional loan).
• 10% second mortgage (home equity loan or HELOC).
• 10% cash down payment from you.

Because the first mortgage sits at 80% loan-to-value, you avoid private mortgage insurance entirely. The trade-off is that you carry two loans, and the second mortgage typically has a higher interest rate.

This strategy works best for buyers who have some savings but not a full 20% down payment. It is not truly zero-down, but it reduces the cash outlay significantly while keeping monthly costs competitive.

Other Low-Down Alternatives (3–3.5% Down)

Several programs let you buy with a small down payment, and when paired with down payment assistance (DPA), your out-of-pocket cost could be close to zero:

• FHA loans: 3.5% down with a 580+ credit score. Available through most lenders, including when buying an Opendoor home.
• Fannie Mae HomeReady: 3% down for borrowers earning at or below 80% of area median income.
• Freddie Mac Home Possible: 3% down with similar income limits.

Many state and local housing finance agencies offer grants or forgivable second mortgages that cover part or all of the down payment. Look into first-time homebuyer programs in your area, and consider speaking with a HUD-approved housing counselor for personalized guidance.

The Real Trade-Offs of a No Down Payment Mortgage

A zero-down loan can get you into a home faster, but it comes with costs you should understand before you commit.

Higher monthly payments. Financing 100% of the price means a larger loan balance and a bigger payment. Before committing, calculate how much you can actually afford based on your full budget — not just the maximum a lender approves.

Slower equity growth. With no starting equity, you rely entirely on appreciation and principal paydown to build ownership. If home values dip even modestly, you could owe more than the home is worth — a situation known as being "underwater."

Potentially higher interest rates. Lenders may price in slightly higher rates for zero-down loans to offset the added risk, though VA loans are a notable exception. If you lock in at a higher rate, consider whether buying down the rate at closing makes financial sense for your timeline.

Funding fees and guarantee fees. VA and USDA loans skip PMI but charge their own fees. While often cheaper than PMI over time, these fees still add to the true cash needed to buy a house.

No financial cushion. If the down payment represents every dollar you have, a post-purchase repair or emergency could put you in a difficult position. Aim to keep at least three to six months of housing payments in reserve, even with a zero-down loan.

When $0 Down Makes Sense (and When It Doesn't)

It makes sense when:

• You qualify for a VA loan and want to preserve cash for reserves, moving costs, or improvements.
• You are in a USDA-eligible area, meet the income limits, and the home fits your long-term plans.
• You have strong income, good credit, and savings set aside — but prefer to keep liquidity rather than tie up cash in a down payment.

It may not make sense when:

• You have no savings beyond what a down payment would have required — closing costs, inspections, and early repairs still demand cash.
• You plan to move within two to three years, since you may not build enough equity to cover selling costs.
• Home prices in your market are at historical highs and you are uncomfortable with the risk of negative equity.

How to Apply for a No-Down-Payment Mortgage

• Confirm your eligibility. For VA loans, request your Certificate of Eligibility. For USDA loans, check the property eligibility map and verify your household income qualifies.
• Gather documentation. You will need pay stubs, W-2s or tax returns, bank statements, and government-issued ID. VA borrowers also need their DD-214 or statement of service.
• Get pre-approved with multiple lenders. Rates and fees vary, so compare offers from at least two or three lenders. Opendoor accepts conventional, FHA, VA, and USDA financing, and you can get pre-approved with any lender of your choosing. For a step-by-step walkthrough, see our guide to the mortgage application process.
• Lock your rate. Once you are under contract, lock in your interest rate promptly. Monitor current average rates to ensure your offer is competitive.

Disclosure

Opendoor Home Loans LLC is not available in all markets. Products, programs, rates, and terms are subject to change without notice. This material is provided for informational purposes only and is not an offer or guarantee of credit. Contact Opendoor Home Loans for current availability.