Lenders That Offer Mortgages With No Down Payment Required
What "no down payment" actually means from a lender
A no down payment mortgage means you borrow 100% of the home's purchase price instead of putting money down upfront. The lender covers the full amount; you start repaying immediately through your monthly mortgage payment. This is different from a low down payment loan (which might require 3% or 5%) — with no down payment, you contribute nothing at closing except closing costs, which you may be able to roll into the loan or have the seller cover.
The trade-off is real: lenders charge higher interest rates on no down payment loans because they have more money at risk. You will also pay mortgage insurance (PMI on conventional loans, or built-in insurance on government-backed loans), which protects the lender if you stop paying. This insurance costs between 0.5% and 2% of your loan amount per year, added to your monthly payment.
No down payment mortgages exist, but they are not common in the current market. Most lenders require at least 3% down. The programs that do offer 100% financing are specific government-backed loans, bank portfolio loans (rare), and some credit union programs. Your approval depends on your credit score, income, debt-to-income ratio, and the property itself.
Key Takeaways
- VA loans (for military members and veterans) and USDA loans (for rural properties) are the most widely available no down payment options, though each has strict may be able to access rules.
- Conventional loans almost never go to 100% financing; most require at least 3% down, and you pay mortgage insurance on top of a higher interest rate.
- Your credit score, debt-to-income ratio, and income stability matter more without a down payment, because the lender has no equity cushion.
- Closing costs still apply even with no down payment; some lenders allow you to roll them into the loan or negotiate with the seller to cover them.
- The monthly payment on a no down payment loan is higher than an identical loan with 20% down, because you are borrowing more and paying insurance.
VA loans: the most accessible no down payment option
If you are a current or former member of the military, a VA loan is the strongest path to a no down payment mortgage. The U.S. Department of Veterans Affairs guarantees part of the loan, which means the lender takes less risk and will lend you the full purchase price. You do not need to be a veteran; active duty service members, National Guard members, and some surviving spouses also may have access to.
To use a VA loan, you need a Certificate of may be able to access (COE), which you request from the VA. You can apply online through VA.gov, by mail, or through your lender — most lenders can pull it electronically now. The process takes a few days to a week. You will need your discharge papers (DD Form 214) or your current military ID.
VA loans have no mortgage insurance requirement, which saves you hundreds of dollars per month compared to other no down payment loans. You do pay a one-time VA funding fee (between 1.4% and 3.6% of the loan amount, depending on your military status and whether you have used a VA loan before), but this can be rolled into the loan. Interest rates on VA loans are typically lower than conventional loans at the same credit score.
The catch: you must buy a primary residence (not an investment property), the home must meet VA property standards, and you cannot use a VA loan to cash out equity from a property you already own. Your debt-to-income ratio usually cannot exceed 41%, though some lenders will go higher if your credit is strong.
USDA loans for rural and suburban properties
The U.S. Department of Agriculture backs mortgages for properties in rural and some suburban areas, with no down payment required. A USDA loan is available to anyone (not just farmers), but the property must be in an may be able to access area. You can check whether an address qualifies on the USDA's website by entering the zip code.
Income limits apply: your household income cannot exceed 115% of the median income for your county (or 150% in some cases if you are buying in a designated rural area). For a family of four, this might be $90,000 to $120,000 depending on where you live, but it varies widely by location. You can find your county's limit on the USDA Rural Development website.
USDA loans require mortgage insurance, paid as an upfront fee (1% of the loan amount) and an annual premium (0.35% to 0.8% per year). Like VA loans, the upfront fee can be rolled into your loan. Your credit score typically needs to be at least 640, and your debt-to-income ratio usually cannot exceed 41%.
The application process is similar to a conventional mortgage: you work with a USDA-approved lender, provide income verification and tax returns, and the lender submits your application to USDA for final approval. This adds one to two weeks to the timeline compared to a conventional loan.
Conventional loans with minimal down payment as an alternative
If you do not may have access to for VA or USDA loans, a conventional loan with 3% down is often easier to obtain than hunting for a true no down payment conventional lender. The difference in your monthly payment is smaller than you might think: on a $300,000 home, putting 3% down instead of 0% saves you roughly $50 to $100 per month in mortgage insurance, but you need $9,000 upfront.
Some first-time homebuyer programs and down payment assistance programs can cover that 3% (or more), which effectively gives you a no down payment loan without the higher rates and insurance costs. These are run by nonprofits, state housing agencies, and local governments. If you may have access to for assistance, this route is usually cheaper than a true no down payment loan.
Conventional loans with 3% down require mortgage insurance until you reach 20% equity in the home (or until you refinance). Your interest rate will be higher than a 20% down loan, but lower than a VA or USDA loan if your credit is average. Credit score requirements are typically 620 or higher, though 640+ gets you better rates.
Portfolio loans and credit union programs (rare and narrow)
Some banks and credit unions keep mortgages on their own books instead of selling them to investors like Fannie Mae or Freddie Mac. These portfolio lenders have more flexibility and occasionally offer no down payment mortgages, but they are uncommon and usually require a strong relationship with the bank, excellent credit (700+), and a low debt-to-income ratio.
Credit unions sometimes offer no down payment loans to members, particularly if you have been banking there for years and have a solid savings history. The terms and rates vary widely. If you are a credit union member, ask your loan officer whether portfolio lending is available and what the requirements are.
These loans are not standardized, so you cannot shop rates the way you can with VA, USDA, or conventional loans. If you find a lender offering this, get the terms in writing and compare the total cost (interest rate plus fees plus insurance) against a 3% down conventional loan with down payment assistance.
What lenders look for when you have no down payment
Without a down payment, lenders scrutinize everything else. Your credit score becomes the primary signal of risk. Most lenders want 640 or higher for no down payment loans; 680+ gets you better rates. A single late payment in the past two years can disqualify you or raise your rate significantly.
Your debt-to-income ratio (total monthly debt payments divided by gross monthly income) is the second filter. Most no down payment lenders cap this at 41% to 43%, meaning if you earn $5,000 per month, your total debt payments (car loans, credit cards, student loans, plus the new mortgage) cannot exceed $2,050 to $2,150. If you are close to this limit, paying down a car loan or credit card before applying can help.
Income stability matters more than with down payment loans. Lenders want to see two years of employment history in the same field, or a clear explanation if you changed jobs. Self-employed borrowers need two years of tax returns and may face stricter scrutiny. Seasonal income is averaged over the past two years.
The property itself must appraise at or above the purchase price. With no down payment, you are borrowing the full appraised value, so if the home appraises low, the deal falls apart unless you can cover the difference in cash.
Closing costs and how to handle them with no down payment
Closing costs (title insurance, appraisal, attorney fees, recording fees, and lender fees) typically run 2% to 5% of the loan amount. On a $300,000 home, that is $6,000 to $15,000. Even with no down payment, you owe these costs at closing.
You have three options: pay them out of pocket, roll them into the loan (increasing your monthly payment), or negotiate with the seller to cover them. Sellers are most likely to cover closing costs in a buyer's market (when there are many homes for sale and few buyers). In a seller's market, this is harder to negotiate.
If you roll closing costs into the loan, your loan amount increases and so does your monthly payment and total interest paid. On a $300,000 home with $10,000 in closing costs rolled in, you are borrowing $310,000 instead. Over 30 years at 7%, that adds roughly $65 per month to your payment.
Frequently Asked Questions
Can I get a no down payment mortgage with a credit score below 640?
Most lenders will not approve a no down payment loan below 640, because the risk is too high without equity in the home. Some credit unions or portfolio lenders may go lower, but rates will be significantly higher. If your score is below 640, consider waiting six months to a year while you pay down debt and fix any errors on your credit report, then reapply.
What happens if the home appraises below the purchase price on a no down payment loan?
The deal typically falls apart unless you can pay the difference in cash. The lender will not lend more than the appraised value, so if you agreed to pay $300,000 but it appraises at $290,000, you need $10,000 to close. This is why getting a pre-approval (not just pre-qualification) matters — it includes an appraisal contingency so you can walk away if this happens.
Is a no down payment mortgage more expensive than putting 20% down?
Yes, significantly. You pay a higher interest rate, mortgage insurance, and interest on a larger loan amount. Over 30 years, a no down payment loan can cost $100,000 to $200,000 more than a 20% down loan on the same home. However, if you cannot save 20% and a down payment assistance program is not available, a no down payment loan may be your only path to homeownership now rather than waiting years to save.
Can I use a no down payment loan to buy an investment property?
No. VA loans, USDA loans, and most conventional no down payment programs require the property to be your primary residence. You cannot use them to buy a rental property or a second home. If you are investing, you will need a down payment (typically 15% to 25%) and a different loan product.
How long does it take to get approved for a no down payment mortgage?
VA and conventional loans typically take 30 to 45 days from application to closing. USDA loans take 45 to 60 days because of the additional government review step. The timeline depends on how quickly you provide documents, how busy the lender is, and whether the property appraises smoothly. Delays often happen at the appraisal or title stage, not the approval stage.