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How to Buy a New Home with No Down Payment

Purchasing a home is the biggest task and most important financial decision in life. Most potential home buyers wonder how much they will have to save to get a mortgage. It’s possible to purchase a house without needing the upfront funds of a down payment. Here, I’m going to discuss some options you have when you want to purchase a home without a down payment. 

Mortgage With No Down Payment

The main path to getting a mortgage without a down payment is with a government-backed loan. These loans are powered by the federal government which means the lender doesn’t have to take on all the risk if there is a default that leads to the forecast.

VA Loans 

These loans are insured by private lenders such as credit unions, banks, and mortgage finance companies and guaranteed by the veteran’s affairs department. VA loans generally have low or no down payment requirements and lower interest rates when compared to traditional mortgage products. These loans are more flexible and allow for a higher debt to income ratio and lower credit scores. 

USDA Loans 

USDA loans are powered by the United States Department of Agriculture. The government provides this loan to encourage development in rural and suburban areas. The great news is you can get this loan with zero down payment. It also has lower fees when compared to other types of loans. 

Physician loans

Are you a medical professional? If yes, you qualify for a physician loan with no down payment. This loan doesn’t need private mortgage insurance, and generally, provides flexible proof of employment requirements and higher debt-to-income ratios because the borrower may have higher medical school loans.

Zero-Down Home Loans With Private Lenders

If you’re not interested in government-backed loans to get a mortgage with no down payment, you can go with a private lender. Some financial lenders are also ready to offer no money down mortgages. 

Advantages and Disadvantages of No Down Payment Mortgage

There are some things you have to consider before signing up. 


You do not have to reduce your cash balance to make a large down payment (or wait until you have enough savings)

Don’t have to worry about paying mortgage insurance on top of repaying loans in most cases. 

If you apply for a government-backed loan, you will get more favorable terms and conditions. 


If the loan is not supported by a government agency, it will come with a higher interest rate.

The lender will usually charge higher origin and finance fees.

You usually need a good credit score to qualify.