Can you buy a house with no money down?

VA and USDA loans often require no down payment

Homebuyers sometimes ask us if they can buy a house with "no money down" which often means “without making a down payment.” If you qualify for a VA or USDA loan, you may be able to buy a house without a down payment.

However, most homebuyers also need money to pay the closing costs that typically come with buying a house. This means you usually need to have some money to buy a home, regardless of the type of loan you get. Read on to learn about down payments and closing costs for home buyers.

Buying a house with no down payment

VA loans and USDA loans can help you buy a house without a down payment. These loans are restricted to certain homebuyers however. Only veterans, active-duty military personnel, and some surviving spouse can qualify for a VA loan. Anyone can qualify for a USDA loan but you are restricted to buying homes in eligible rural and suburban communities.

These are the only "no money down" options for buying a home and you will need to meet your lender’s credit, income, and financial requirements to have your mortgage application approved.

It is possible to buy a home with a low down payment. Anyone can qualify for an FHA loan and you can use an FHA loan to buy a house anywhere in the United States. Depending on your credit score, you may qualify to buy a home with a down payment as small as 3.5% of the purchase price. That means if you wanted to buy a home that costs $250,000, you may be able to make a down payment as low as $8,750.

Conventional loans typically have higher minimum down payments compared to FHA loans, and they usually have higher credit and financial requirements too.

Homebuyer assistance programs

Many states and communities have programs that can help make buying a home more affordable. The U.S. Department of Housing and Urban Development (HUD) has information for homebuyers in all fifty states, the District of Columbia, Puerto Rico, and the Virgin Islands. Visit HUD’s State Information page, click on your location, and see if there are programs that apply to you.

Buying a house with no closing costs

Almost everyone who buys a house needs to pay closing costs. Further, you will frequently be required to pay many of these costs in cash at closing. This means you will need to have money available to pay them.

Some loans may allow you to add some of your closing costs to your mortgage amount when you buy a home. For example, if you are required to pay the VA funding fee that usually comes with a VA loan, you may be able to add the cost of this fee to your mortgage rather than paying it in cash at closing.

How much you will need to pay in closing costs depends on the type of loan you have, your personal credit and finances, and other factors.

"Money down" is just one part of home affordability

Down payments and closing costs are just two of the things you should consider when you are thinking about buying a home. Your income, mortgage interest rate, other monthly debt payments beside your mortgage payments, and the cost of property taxes and homeowners insurance also affect the price of homes you may be able to buy. Check out our mortgage affordability calculator to get an estimate of what you can afford.

Last reviewed and updated April 2023 by Freedom Mortgage Corporation.