Mortgages Without Down Payment or Low Down Payment


Looking for home mortgages with low or no down payment? Check out this list to know more.

No down payment

  • VA loan
    • The Department of Veterans Affairs (VA), ensures buying mortgages without required down payment for eligible active-duty service members, veterans, and specific members of the National Guard and Reserves.
    • Private lenders start VA loans, that the VA guarantees.
    • The borrower gives a fee for funding, that can be moved into the loan amount.
    • There is no mortgage insurance.
    • Funding fees can be as low as 1.25% or as high as 3.3%.
  • USDA
    • The U.S. Department of Agriculture's Rural Development program for mortgage guarantee is so popular, that before the fiscal year ends, it runs out of money.
    • Did you know that Rural Development loans are not limited to farmland?
    • The USDA has a map where geographical areas are marked to know which locations are eligible.
    • This program is meant for first-time buyers, with a few exceptions.
    • The program has household income restrictions.
    • There is no mortgage insurance and the mortgage comes from a bank.
    • A 1% guarantee fee is paid upfront, which may be rolled into the loan value.
    • A guarantee fee of 0.35% of the loan balance is paid yearly.
  • Navy Federal Credit Union
    • The country's largest in membership and assets offers 100% financing to eligible members who purchase primary homes.
    • Navy Federal qualification is restricted to the members of the military, a few civilian employees of the U.S. Department of Defense and military, and family members.
    • The zero down payment program of the credit union is similar to the VA's, with a funding fee 1.75% less than the VA's.

Low down payment

  • Federal Housing Administration (FHA)
    • If you have a not so perfect credit history, FHA is the low-down-payment choice available for you.
    • It has a minimum down payment of 3.5%.
    • You will be charged with the 1.75% of your mortgage amount upfront.
    • For 30-year loans with a minimum down payment, a 0.8% of the mortgage amount annual premium is charged.
  • Mortgage insurance
    • Borrowers who are qualified with private mortgage insurance (PMI) can make down payments for as low as 3%.
    • For a lot of borrowers, PMI costs much less than the Federal Housing Administration mortgage insurance. However, PMI has credit requirements which are more strict.
    • Another advantage of PMI over FHA is that, once your mortgage balance is below 80% of the home's price, you can cancel PMI. In order for you to cancel FHA insurance, you must refinance into a non-FHA loan.