How to Buy a House with No Money: Top Strategies for Homebuyers

In this article

1. Key Takeaways
2. Understanding Zero-Down and Low-Down Mortgages
3. Zero Down Payment Options
4. VA Loans for Veterans and Service Members
5. USDA Loans for Rural and Suburban Buyers
6. Low Down Payment Options
7. FHA Loans: 3.5% Down
8. Conventional 97, HomeReady, and Home Possible
9. Down Payment Assistance Programs
10. Using Gift Funds to Buy a House
11. Gift Letter Requirements
12. Gift of Equity
13. Seller Concessions and Lender Credits
14. Comparing Your No-Money-Down and Low-Money-Down Paths
15. Steps to Buying With Little or No Money Down
16. Summary
17. Frequently Asked Questions

Last updated: Sept 2026. By Alvaro Moreira, NMLS #148581. Moreira Team | MortgageRight. MortgageRight NMLS #2239; Atlanta Branch NMLS #1285851.

Key Takeaways

• VA and USDA loans let eligible buyers finance 100% of the purchase price, meaning a true $0 down payment for qualified borrowers.
• FHA loans require just 3.5% down, and conventional programs like Conventional 97, HomeReady, and Home Possible allow as little as 3% down.
• Down payment assistance programs, gift funds from family, seller concessions, and lender credits can all be combined to bring your out-of-pocket cash close to zero.
• Putting little or nothing down usually means paying mortgage insurance and can mean a higher rate, so it is worth weighing against your monthly payment goals.
• Documentation matters: gift letters, assistance program paperwork, and seller concession terms all need to meet your lender’s guidelines to avoid delays at closing.

“I don’t have 20% saved up” stops a lot of people from even starting the home search, and it should not. Between zero-down government loans, low-down conventional programs, assistance grants, and gift funds, most buyers today do not need anywhere near 20% down, and plenty do not need any of their own cash at all. Here is a practical look at how to buy a house with no money down, or as close to it as your situation allows.

Understanding Zero-Down and Low-Down Mortgages

A zero-down mortgage finances the entire purchase price, so you show up to closing without a down payment. These loans are backed by government agencies, specifically the Department of Veterans Affairs and the U.S. Department of Agriculture, which insure the loan for the lender and make it possible to offer 100% financing. A low-down mortgage still requires some cash at closing, but a small amount, often 3% to 3.5% of the purchase price rather than the traditional 20%.

Both paths come with tradeoffs worth understanding upfront.

• The upside: you can buy sooner instead of spending years saving a large down payment, and you keep more cash on hand for moving costs, furniture, and emergencies.
• The tradeoff: a smaller down payment usually means mortgage insurance (either PMI on conventional loans or a mortgage insurance premium on FHA loans), and it means financing a larger balance, which affects your monthly payment.

Neither of those tradeoffs should scare you off. For many buyers, the cost of waiting to save 20% (rising home prices and rent payments that build no equity) outweighs the cost of mortgage insurance, which can often be removed or refinanced away later. Run your own numbers on our mortgage calculator to see how different down payment amounts affect your monthly payment.

Zero Down Payment Options

VA Loans for Veterans and Service Members

VA loans let eligible veterans, active-duty service members, and certain surviving spouses finance up to 100% of the purchase price with no down payment required. There is no monthly mortgage insurance on a VA loan, which is a meaningful long-term savings compared to FHA or low-down conventional loans. Most borrowers pay a one-time VA funding fee that can be rolled into the loan amount rather than paid out of pocket, and veterans with a service-connected disability rating are typically exempt from that fee. Since 2020, there has been no VA loan limit for borrowers with full entitlement, so qualified buyers are not capped by a specific dollar amount the way they are with other zero-down options.

USDA Loans for Rural and Suburban Buyers

USDA loans offer another true 0% down path for buyers purchasing in USDA-eligible areas, which cover far more ground than most people expect, including many suburbs just outside major Georgia cities. The home must be a single-family primary residence, and your household income generally cannot exceed 115% of the area median income for your county and household size. USDA loans charge a guarantee fee rather than traditional mortgage insurance, and it tends to run lower than FHA’s premiums. If you want the details specific to Georgia, our guide to qualifying for a USDA loan in Georgia breaks down eligible areas and income limits county by county.

Low Down Payment Options

If you are not eligible for a zero-down loan, several programs still get you into a home with a small down payment.

FHA Loans: 3.5% Down

FHA loans require a minimum down payment of 3.5% for borrowers with a credit score of 580 or higher, or 10% down for scores between 500 and 579. FHA loans require both an upfront and an annual mortgage insurance premium, and on most FHA loans that annual premium lasts for the life of the loan unless you later refinance into a conventional loan. Even so, the lower credit score threshold makes FHA one of the most accessible paths to homeownership for buyers who are still building credit. See our posts on understanding FHA loan qualifications and FHA mortgage down payment requirements for the full picture.

Conventional 97, HomeReady, and Home Possible

The conventional loan world also has low-down options. The Conventional 97 program allows a down payment as low as 3%, backed by Fannie Mae or Freddie Mac, generally with a minimum credit score of 620 and a debt-to-income ratio up to around 50%. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs also offer 3% down financing and are built specifically for low-to-moderate income borrowers, with more flexibility on income sources. As with FHA, a down payment below 20% means paying PMI, but PMI on a conventional loan can be cancelled once you reach 20% equity, which is not the case with most FHA mortgage insurance. Our lowdown on down payments post compares these programs side by side in more detail.

Down Payment Assistance Programs

Down payment assistance (DPA) programs help cover your down payment and sometimes closing costs, often through grants or forgivable second loans that do not require repayment if you meet the program’s occupancy requirements. Eligibility and terms vary by program and by state or county, but many require a minimum credit score around 640 and a maximum debt-to-income ratio around 45%. Combined with an FHA or conventional low-down loan, DPA funds can bring your total out-of-pocket cost close to zero. Ask your loan officer which programs you may qualify for in your target county, since availability and funding levels change from year to year.

Using Gift Funds to Buy a House

Family support is one of the most common ways buyers cover a down payment without dipping into their own savings.

Gift Letter Requirements

If a family member is gifting you money for your down payment, your lender will require a gift letter documenting the donor’s information, their relationship to you, the amount and date of the gift, and a statement confirming that no repayment is expected. You will also typically need a paper trail, such as a bank statement showing the funds leaving the donor’s account and landing in yours, to satisfy underwriting.

Gift of Equity

If you are buying a home from a family member, a gift of equity lets the seller apply a portion of the home’s equity toward your down payment instead of exchanging cash. It works differently from a cash gift and comes with its own documentation requirements. Our post on how a gift of equity helps meet requirements to buy a house covers exactly how that process works.

Seller Concessions and Lender Credits

Even when your down payment is covered, closing costs, typically 3% to 5% of the loan amount, are a separate expense. Two negotiating tools can help offset them.

• Seller concessions: The seller agrees to cover part of your closing costs, such as appraisal or inspection fees, as part of the purchase negotiation. How much a seller can contribute depends on your loan type, and concessions tend to be easier to negotiate in a buyer’s market than in a competitive seller’s market.
• Lender credits: Your lender covers some of your closing costs in exchange for a slightly higher interest rate. This lowers your cash due at closing but increases your monthly payment over the life of the loan, so it is worth running the long-term math before choosing this route.

Our first-time home buyer closing cost guide breaks down exactly what to expect and where these negotiations can make the biggest difference.

Comparing Your No-Money-Down and Low-Money-Down Paths

Steps to Buying With Little or No Money Down

1. Check your credit and know your score before you start shopping. Our credit scores and home buying post explains what lenders look for and how to improve your score quickly.
2. Talk with a loan officer about which zero-down or low-down programs you qualify for, including VA, USDA, FHA, and conventional options.
3. Ask about down payment assistance programs available in your county, and whether they can be paired with your loan type.
4. If family is helping, get the gift letter and documentation requirements from your lender before the funds move.
5. Once you are under contract, negotiate seller concessions where the market allows, and compare lender credits against the long-term cost of a higher rate.
6. Get pre-approved so you know your real numbers. Learn what to expect in our mortgage loan process overview, and ask whether you qualify for our approval guarantee.

Summary

Buying a house with little or no money down is genuinely achievable in 2026, whether through a zero-down VA or USDA loan, a low-down FHA or conventional program, down payment assistance, gift funds, or some combination of all of the above. The key is understanding which combination fits your eligibility and your long-term budget, not just chasing the smallest number at closing. Our first-time homebuyer resources are a good next stop if you are just starting to map out your options.

Frequently Asked Questions