6 Low To No Down Payment Options For All Borrowers

The myth that you need 20% down has kept families from becoming homeowners for years. While many programs require a down payment, there are many low to no down payment options that can help you get into a home today!

No Down Payment

Down Payment Assistance Programs

Depending on where you live and your financial situation, you may have access to programs that will pay your down payment on your behalf. These programs often come with higher interest rates than your 20% down programs due to the high level of risk for the lender but can be the perfect boost to help your family get into a home.

If this is a program that you’re interested in, make sure you to as your lender the following questions:

  • Is this a grant or a forgivable second mortgage?
  • How much higher are the interest rates than standard programs?
  • Are there any extra costs at closing for using this program?
  • Are there any education requirements for this program?
  • Are there location restrictions for this program’s eligibility?


If you served the United States military, then you may be eligible for a VA home loan. Backed by the Department of Veterans Affairs, VA home loans are a no down payment option with a few perks that aren’t included in other low to no down payment options. These perks include:

  • No down payment
  • No monthly mortgage insurance (which is usually paid on loans with a down payment under 20%)
  • No pre-payment penalty for paying off your home before the end of your loan term
  • Looser qualification guidelines
  • Ability to finance your funding fee
  • The loan is assumable


If you’re looking for a rural and cozy home away from the hustle of the city, then the USDA home loan is a perfect choice. Backed by the Department of Agriculture, the USDA home loan is a solution for homebuyers looking to buy homes in more rural areas of the United States.

USDA home loans are restricted to low-income borrowers and must fit within the USDA sets and updates yearly. The most significant benefit of this program is that you don’t have to put any money down. Other benefits include:

  • Lower credit scores accepted
  • Low origination fee that can be rolled into the loan
  • Lower interest rates
  • Easier refinance transactions for the future

Low Down Payment


If you are looking for a “little help” when it comes to your down payment but aren’t a good fit for the other programs mentioned, the FHA home loan can help provide you with the pathway to homeownership. Backed by the Federal Housing Administration, the FHA home loan offers down payment options as low as 3.5%. Other features of the FHA loan include:

  • Flexible credit guidelines
  • Flexible income guidelines
  • Flexible gifting guidelines
  • MIP (Mortgage Insurance Premium) for the life of the loan
  • Stricter inspection guidelines


Conventional loans are a great option for families that fit your “average borrower profile.” Backed by Freddie Mac and Fannie Mae, conventional loans benefit those that have less risk. Allowing a down payment as low as 3%, conventional loans still give you the ability to become a homeowner with less down. Other features of conventional loans include:

  • Mortgage Insurance that drops off at 80% LTV
  • Stricter credit guidelines
  • Stricter income guidelines
  • Stricter gifting guidelines
  • Flexible inspection guidelines
  • Rewards less risky borrowers with better interest rates

If you have questions about which program would be the best for you and your family, click here and schedule a free consultation to speak with one of our loan officers. They can help you build your homeownership plan today!