Zero down · Honest guide
How to Buy a House With No Down Payment
Four loan programs finance 100% of a home’s price in 2026 — VA, USDA Guaranteed, USDA Direct, and the VA’s Native American Direct Loan — plus physician loans and credit-union products that do the same for specific buyers. None of them is subprime: VA loans carry the lowest rates of any loan type and half the delinquency of FHA. This is the deep playbook on each program — eligibility, fees, entitlement math, and the honest cases where zero down is the wrong move.
Last updated July 2026
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Zero down, the short version
First, clear the vocabulary: “no down payment” almost never means “free.” Every zero-down program either restricts who can use it (military service, rural location, household income, profession) or charges a financed upfront fee that stands in for the down payment — the VA’s one-time funding fee, USDA’s 1% guarantee fee. Those fees are real money, but as you’ll see in the math, they’re usually cheaper than years of PMI.
The four true 0%-down programs: the VA loan (veterans, service members, eligible surviving spouses), USDA Guaranteed (moderate-income buyers in eligible areas — 97% of U.S. land), USDA Direct 502 (low-income rural buyers, with subsidies to an effective 1% rate), and the VA Native American Direct Loan. Alongside them: physician loans (0% down, no PMI, for medical and select professionals) and credit-union 100% products like Navy Federal’s Choice loans.
This guide goes deep on each. If you don’t fit any of these programs, don’t leave — the broader path (a 3% loan with the down payment covered by assistance, concessions and gifts) is covered in our pillar guide to buying with no money, and briefly at the end of this one.
Program 1
The VA loan: the best mortgage in America
Zero down, no monthly mortgage insurance, and the lowest rates of any loan type — six years running.
The scale says it all: the VA guaranteed 528,340 loans in fiscal 2025, up 26.8% in a year, and crossed its 29-millionth loan since 1944. Roughly one in ten U.S. purchase mortgages is a VA loan. The essentials — 0% down, no PMI, a financeable funding fee — are covered in our VA loan guide; here’s the deeper machinery that determines what you can actually do with it.
Who’s eligible, precisely
Service thresholds: 90 continuous days of active duty during wartime — and since the Gulf War era opened in August 1990 and never closed, essentially everyone on active duty since then meets it. 181 days peacetime. 6 years in the Guard or Reserve — or, since 2020, just 90 cumulative days of full-time Title 32 Guard duty (30 consecutive). A service-connected disability discharge waives the minimums entirely. Surviving spouses qualify if the veteran died in service or from a service-connected disability (and are exempt from the funding fee). Discharge must be “other than dishonorable” — but other-than-honorable cases get individual review, and upgrades can restore access.
The Certificate of Eligibility (COE): don’t mail forms. Most lenders pull it electronically in minutes; about two-thirds of requests issue instantly.
Entitlement: the math that decides your ceiling
Full entitlement = no loan limit. Since 2020, a veteran with full entitlement can buy at any price a lender will approve, with $0 down. County loan limits ($832,750 baseline in 2026; $1,249,125 high-cost) only bind buyers with partial entitlement — meaning an active VA loan or an unrestored past default.
The partial-entitlement formula: 25% of the county limit, minus entitlement already used, times four. Worked example: you’re using $75,000 of entitlement on a current VA loan and want a second home in a standard county. 25% × $832,750 = $208,187; minus $75,000 = $133,187; × 4 = a $532,750 zero-down ceiling — yes, a second VA loan at 0% down while keeping the first. That’s “second-tier entitlement,” and it demolishes the “you can only use VA once” myth. Sell and pay off a VA loan and your entitlement restores in full; there’s also a one-time restoration if you paid it off but kept the house.
The funding fee, in full (2026)
Purchase with less than 5% down: 2.15% first use, 3.30% subsequent. With 5–9.99% down: 1.50% (either use). With 10%+ down: 1.25%. Streamline refinance (IRRRL): 0.50%. All financeable into the loan. Who pays nothing: veterans receiving disability compensation (any rating from 10%), those eligible but taking retirement pay instead, active-duty Purple Heart recipients, and surviving spouses receiving DIC — roughly 6 million of America’s ~18 million veterans. Two tactics: on a subsequent use, putting just 5% down cuts the fee from 3.30% to 1.50%; and note that restoring entitlement does not reset you to the first-use rate.
✅ The performance data that kills the myths
“VA loans are slow”: they close in roughly 40–45 days — conventional averages ~41, FHA ~42. The gap is days, not weeks. “VA rates are worse”: backwards — VA has carried the lowest average fixed rate of any major loan type for six straight years, typically 0.25–0.50% below conventional. “Zero down is subprime”: completed VA foreclosures fell to 3,928 in FY2024, and VA delinquency runs at less than half of FHA’s. The VA even gives buyers a protection nobody else gets: the Tidewater process, a two-business-day window to submit better comparable sales before a low appraisal is finalized, plus a formal Reconsideration of Value afterward.
Fine print: the VA sets no minimum credit score — lender overlays typically impose 580–620. VA loans can buy 2–4 unit properties if you live in one, with rental income helping you qualify.
Programs 2 and 3
USDA: zero down across 97% of the map
Not farms. Suburbs, small towns, and nearly all U.S. land area — with the strictest income math in lending.
USDA Guaranteed: the mechanics that matter
Eligibility is by address, not occupation. Areas under ~35,000 population that are “rural in character” qualify — check the exact address on USDA’s eligibility map, because boundaries shift and many metro-edge suburbs qualify.
The income trap: everyone counts. USDA compares the income of every adult in the household — including a non-borrowing spouse or working adult child — against the limit: $119,850 for a 1–4 person household in standard areas for 2026 ($158,250 for 5–8; higher in high-cost counties). Slightly over? Deductions can save you: $480 per dependent, documented childcare for kids under 12, disability and elderly-household deductions all reduce countable income.
Credit and ratios: no regulatory floor, but 640 is the practical threshold for automated approval; below it means manual underwriting with compensating factors. Baseline DTI is 29/41, waivable to 32/44 and beyond with automated approval.
Fees — cheaper than FHA: 1% upfront (financeable) plus 0.35% annually. On a $250,000 loan that’s about $73/month versus roughly $115/month for FHA’s insurance. Two quirks: files get a second review by USDA Rural Development after your lender approves (add 1–2 weeks), and funding can pause briefly at the fiscal year-end around October 1 — time your closing accordingly.
USDA Direct 502: the most overlooked mortgage in America
Here the government itself is the lender — no bank involved. It serves low-income (50–80% of area median) and very-low-income (below 50%) buyers in eligible areas. The note rate is 5.25% as of July 1, 2026, but payment assistance subsidizes the effective rate to as low as 1%, with terms up to 33 years (38 for very-low income). Homes must be modest — typically around 2,000 sq ft or less. The subsidy is recaptured (partially, capped) when you sell or move out, and it never applies if you sell at a loss.
How to apply: not through a bank — through USDA Rural Development field offices or certified nonprofit packagers, year-round. Processing runs longer (30–90+ days), but for a qualifying family, an effective 1% rate beats every product on this page.
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Programs 4 and 5
Native American programs and physician loans
Two very different niches — one deeply subsidized, one built for high earners with student debt.
Section 184 and the VA NADL
HUD Section 184 serves enrolled members of federally recognized tribes — technically low-down rather than zero: 2.25% down on loans over $50,000 (1.25% below). It got dramatically cheaper in 2023: the upfront fee dropped to 1% and the annual fee was eliminated entirely. Usable on tribal trust land or ordinary fee-simple property across roughly 38 states, with no income limit.
The VA Native American Direct Loan (NADL) solves a problem no private lender will touch: mortgages on federal trust land. The VA lends directly — 0% down, no PMI, a rate starting at 2.5% (deeply subsidized), and a 1.25% funding fee with the usual exemptions. It requires a Memorandum of Understanding between the tribe and the VA; 114 tribal organizations had one as of FY2024, and the list keeps growing. Small program, extraordinary terms.
Physician loans: 0% down, no PMI, student debt forgiven (by the underwriter)
Who: MD, DO, DDS and DMD nearly everywhere; podiatrists, veterinarians, optometrists, pharmacists, CRNAs, PAs, NPs — and at some banks, attorneys and CPAs. Residents and fellows qualify on an employment contract or match letter, often closing up to 90 days before the job starts.
The structure: portfolio loans held by the bank, so no PMI at 0% down — typically 100% financing up to $750,000–$1 million+, with tiers reaching $2M+ at lower LTVs. The killer feature: deferred or income-based student loan payments are excluded or counted at the actual IBR amount — the difference between approval and denial for a doctor carrying $300,000 in loans.
The price: a rate premium of roughly 0.125–0.375% over conventional. Over the 5–7 years it takes to reach 20% equity, skipping PMI ($17,000–$40,000) usually wins. Skip the physician loan only if you have 20%+ down — then straight conventional prices better. Quotes vary wildly by bank, so collect 3–5 within the same two weeks (they count as one credit pull).
The lender-made products
Credit unions, 1%-down programs — and a 2026 warning
Real products exist. So does a wave of freshly outdated content about programs that just died.
What’s genuinely available
Navy Federal HomeBuyers Choice and Military Choice: conventional 100% financing with no PMI for members. Both carry a 1.75% funding fee — financeable, or waived for a 0.375% rate bump or with 3% down. Homebuyers Choice (upgraded in April 2026 for first-time buyers) serves any eligible member; Military Choice exists for veterans who’ve exhausted their VA entitlement — and that’s the right order: VA first, always, because it prices lower.
Lender 1%-down conventional programs: Rocket’s ONE+ and UWM’s Conventional 1% Down have you put 1% down while the lender grants 2% to reach the conventional 3% minimum — no monthly PMI on ONE+, grants capped around $7,000, income limited to 80% of area median, 620+ credit, and (for ONE+) a $350,000 maximum loan. Effectively subsidized HomeReady/Home Possible loans.
State HFA combos: many states pair a first mortgage with an assistance second covering the down payment and closing costs — “zero out of pocket” by stacking. That’s the pillar strategy: see our state-by-state guides.
⚠️ The 2026 regulatory shakeout: verify before you trust
Several famous bank “zero-down community loans” — most notably Bank of America’s Community Affordable Loan Solution (zero down, zero closing costs, launched 2022) — were built as Special Purpose Credit Programs, and 2026 pulled the ground out from under them: a new CFPB rule (effective July 21, 2026) restricts how for-profit lenders can define these programs, and an FHFA order in March 2026 ended Fannie and Freddie’s support for them. The practical result: the original zero-down versions appear discontinued or curtailed, with banks pivoting to grant programs instead (typically $5,000–$10,000 toward down payment plus closing-cost credits at Chase, Wells Fargo, Citi and BofA). The rules themselves may face court challenges, so this could shift again — which is exactly the point: any article describing a bank’s zero-down program, including this one, must be verified with the bank the week you apply.
The real numbers
Head to head: the same $350,000 home, five ways
At a 6.49% base rate — and remember, VA and USDA usually price below that, widening their lead.
Monthly cost and cash required
VA, 0% down — funding fee financed → loan $357,525 · ~$2,258/mo, no mortgage insurance · $0 down payment cash
Physician, 0% down — loan $350,000 at ~6.74% · ~$2,268/mo, no PMI · $0 down payment cash
USDA, 0% down — 1% fee financed → loan $353,500 · $2,232 + $103 annual fee = ~$2,335/mo · $0 down payment cash
Conventional, 3% down — loan $339,500 · $2,144 + ~$170 PMI = ~$2,314/mo · needs $10,500 cash (PMI cancels at 20% equity)
FHA, 3.5% down — UFMIP financed → loan $343,661 · $2,170 + $158 MIP = ~$2,328/mo · needs $12,250 cash (MIP lasts the life of the loan)
Read it honestly: all five land within about $80/month of each other. The difference isn’t the payment — it’s the $10,000–$12,000 of upfront cash the low-down options demand and the zero-down options don’t, plus the quality of the insurance deal (VA and physician: none; conventional: cancellable; FHA: permanent; USDA: 0.35% for the life of the loan).
The decision tree
Veteran, service member or eligible surviving spouse → VA, almost always. On trust land → NADL. Entitlement exhausted → Navy Federal Military Choice.
Moderate income, address on the USDA map → USDA Guaranteed. Income under 80% of area median in a rural area → ask about Direct 502 first.
Physician, dentist or eligible professional → physician loan; compare 3–5 banks.
Enrolled tribal member → Section 184 anywhere, NADL on trust land if a veteran.
None of the above → you won’t get true 0% down — but a 3% conventional or 3.5% FHA loan with the down payment covered by assistance gets you to nearly the same place. That full stack (assistance + seller concessions + gift funds) is our pillar guide to buying with no money; start with our down payment guide for the base math.
The other side
When zero down is the wrong move
The programs are excellent. That doesn’t make them right for every buyer.
⚠️ Three honest problems
1. You start functionally underwater. Zero equity plus 6–8% selling costs means a $350,000 home must appreciate roughly $24,500 before you could sell without a loss — about 2–3 years at 4% appreciation. If your job, family or plans might move you within three years, zero down can trap you in the house or force a check at closing.
2. You carry more debt. At the $440,600 median, financing 100% instead of 80% means about $560/month more in principal and interest — plus the funding fee or annual fee riding along for the term. The fee is your down payment, financed at 6.49% for 30 years.
3. The appraisal gap has no cushion. In a competitive offer, a low appraisal is dangerous when you have no cash to bridge it. Your tools: VA’s Tidewater window and Reconsideration of Value, renegotiating the price, or walking away under your appraisal contingency — but honestly, a true zero-cash buyer has fewer options, which is one more reason to keep reserves even when the loan doesn’t require them.
The rule: zero down works brilliantly with a 3+ year horizon, a stable or rising market, and an emergency fund left intact after closing. Missing any of the three? Reconsider — the break-even math in our down payment guide covers both directions.
Countering the “weak offer” stigma
Some sellers still discount zero-down offers — especially VA — on outdated fears about speed and appraisals. The counters that work: a fully underwritten pre-approval (not a pre-qualification) from a local, VA-experienced lender, a clean timeline matching conventional norms (the data supports you: ~40–45 days), a solid earnest money deposit, and a listing-agent conversation where your lender directly debunks the myths. In 2026’s balanced market with 4.6 months of inventory, sellers can’t afford to dismiss a well-packaged offer over a financing prejudice.
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Quick answers
No down payment: common questions
Can you really buy a house with no down payment?
Yes — four programs finance 100%: VA loans (veterans, service members, eligible surviving spouses), USDA Guaranteed (moderate-income buyers in eligible areas covering 97% of U.S. land), USDA Direct 502 (low-income rural buyers, subsidized to an effective rate as low as 1%), and the VA Native American Direct Loan. Physician loans and credit-union products like Navy Federal’s Choice loans also reach 100% for specific buyers.
What credit score do you need for a zero-down loan?
Neither the VA nor USDA sets a minimum score in their rules — but lenders add their own “overlays,” typically 580–620 for VA and 640 for streamlined USDA approval (manual underwriting is possible below that with compensating factors like 12 months of on-time rent). Physician loans usually want 700+.
How does the VA funding fee work, and who pays nothing?
It’s a one-time fee — 2.15% of the loan on first use with nothing down, 3.30% on subsequent uses — that can be financed into the loan instead of paid in cash. Veterans receiving disability compensation (any rating from 10%), active-duty Purple Heart recipients, and surviving spouses receiving DIC pay nothing — roughly 6 million veterans qualify for the exemption. Putting just 5% down cuts a subsequent-use fee from 3.30% to 1.50%.
Can I use a VA loan more than once — or have two at the same time?
Both. Entitlement restores in full when you sell and pay off a VA loan, with no lifetime limit on uses. And through second-tier entitlement, you can keep an existing VA loan and open a second one — with $0 down up to a ceiling set by the county loan limit math (in a standard county, often $500,000+ of remaining zero-down capacity).
Is USDA only for farms and deep rural areas?
No — that’s the most costly USDA myth. Eligibility is by address, covering roughly 97% of U.S. land area, including many outer suburbs of major metros. Check the exact address on USDA’s eligibility map. The real constraints are the household income limit ($119,850 for a 1–4 person household in standard areas for 2026 — counting every adult in the home, not just borrowers) and the modest-property rules.
Do zero-down loans have PMI?
The good ones don’t. VA loans, physician loans, the NADL and Navy Federal’s Choice loans carry no monthly mortgage insurance at 0% down. USDA has no PMI but charges a 0.35% annual fee for the life of the loan (still cheaper than FHA). Compare that with FHA’s life-of-loan MIP and conventional PMI — one reason 0%-down programs often cost less monthly than low-down alternatives.
Aren’t zero-down mortgages risky, like before 2008?
The data says no. Today’s zero-down loans are fully documented and ability-to-repay verified. VA loans — all eligible for 0% down — carried just 3,928 completed foreclosures in FY2024 and run delinquency at less than half of FHA’s rate, thanks partly to the VA’s residual-income test. The risk that remains is personal, not systemic: with no equity, you need roughly 7% appreciation before selling breaks even.
What if I’m not a veteran and don’t qualify for USDA?
Then true 0% down likely isn’t available to you — but the practical equivalent is: a 3% conventional or 3.5% FHA loan with the down payment covered by one of the ~2,000 funded assistance programs, plus seller concessions for closing costs. It reaches nearly the same cash-to-close as the zero-down programs. Start with your state’s Housing Finance Agency.
When is buying with no down payment a bad idea?
Three situations: you might move within about 3 years (zero equity plus 6–8% selling costs means selling at a loss), your local market is flat or declining, or you’d have no emergency fund left after closing. Zero down is a leverage tool — powerful with a stable horizon and reserves, dangerous without them.