Knowing how to buy a house with no money down can make homeownership possible even if you haven’t saved for a large down payment. In 2025, there are several strategies and programs that allow qualified buyers to purchase a home with zero down, making the dream of owning a home more accessible than ever. This guide explains how to buy a house with no money down, covering loan options, eligibility, and tips to maximize your chances.
What Does It Mean to Buy a House with No Money Down?
Buying a house with no money down means you finance 100% of the home’s purchase price, eliminating the need for a traditional upfront down payment. This is possible through specific government-backed mortgage programs and down payment assistance, especially for first-time buyers and certain eligible groups.
How to Buy a House with No Money Down: Main Options
1. Use a Zero-Down VA Loan
The VA loan, backed by the U.S. Department of Veterans Affairs, is one of the most popular ways to buy a house with no money down. VA loans are available to eligible veterans, active-duty service members, and some surviving spouses. With a VA loan, you can:
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Purchase a home with no down payment required
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Avoid private mortgage insurance (PMI)
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Benefit from competitive interest rates
To qualify, you must meet service requirements and have sufficient VA loan entitlement. Over 80% of VA buyers put zero down, making this a powerful tool for military families.
2. Apply for a Zero-Down USDA Loan
USDA loans, backed by the U.S. Department of Agriculture, let eligible buyers in rural and some suburban areas buy a house with no money down. Key requirements include:
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The home must be in a USDA-eligible area (many suburban locations qualify)
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Your income must not exceed 115% of the area median
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You must meet credit and employment standards
USDA loans also offer low interest rates and reduced mortgage insurance costs, making them ideal for buyers with limited savings.
3. Seek First-Time Home Buyer Down Payment Assistance
Many states and local governments offer down payment assistance programs for first-time buyers. These can come as grants, forgivable loans, or second mortgages that cover some or all of your down payment. While not always truly “zero down,” they can reduce your upfront costs to nearly nothing.
Other Ways to Buy a House with No Money Down
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Gifted Down Payment: Family members can gift you the down payment, subject to lender guidelines.
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Borrowed Down Payment: In some cases, you can borrow your down payment from a line of credit or personal loan, though this is less common and comes with additional risk.
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Zero Down Programs (Canada): Some Canadian lenders and real estate brokerages offer “zero down” programs for buyers with excellent credit and stable employment, often by allowing you to borrow the minimum down payment or receive it as a gift.
Eligibility Requirements for No Money Down Loans
To buy a house with no money down, you generally need:
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Good credit (usually 640+ for USDA, 620+ for VA)
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Stable income and employment history
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Low debt-to-income ratio (typically below 41–43%)
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Property in an eligible location (for USDA loans)
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VA loan entitlement (for VA loans)
Pros and Cons of Buying a House with No Money Down
Pros
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Faster path to homeownership: No need to wait years to save for a down payment.
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Keep your savings: Use your cash for emergencies, moving costs, or home improvements.
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Access to affordable financing: Government-backed loans often have competitive rates.
Cons
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Higher monthly payments: Financing 100% of the home means larger loan balances.
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Mortgage insurance or funding fees: USDA loans require annual and upfront fees; VA loans have a funding fee (which can be financed).
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Limited property options: USDA loans are restricted to eligible areas; VA loans have property condition requirements.
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Potential for negative equity: With no initial equity, you could owe more than the home’s value if prices fall.
House Buying Tips for No Money Down Success
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Check your eligibility early: Review VA and USDA requirements and get prequalified.
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Explore local assistance: Ask your lender about state and local down payment assistance.
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Compare lenders: Not all lenders offer the same programs or rates for zero-down loans.
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Budget for closing costs: Even with no down payment, you’ll need funds for closing costs (2–5% of the purchase price), though these can sometimes be covered by assistance or negotiated with the seller.
Frequently Asked Questions: How to Buy a House with No Money Down
Q: Can I buy a house with no money down if I’m not a veteran or rural buyer? A: You may qualify for down payment assistance or special programs in your area, but true zero-down loans are usually limited to VA and USDA loans.
Q: Are there risks to buying with no money down? A: Yes. You’ll have less equity and may pay more in interest and fees over time. It’s important to budget carefully and understand the terms.
Q: What credit score do I need for a zero-down loan? A: Most zero-down loans require a credit score of at least 620–640, but higher scores improve your chances and rates.
Conclusion
Learning how to buy a house with no money down opens the door to homeownership for many who might otherwise be shut out by high upfront costs. By leveraging VA and USDA loans, down payment assistance, and specialized programs, you can make your home buying dream a reality—often sooner than you think. Always compare your options, understand the requirements, and work with a knowledgeable lender to find the best path for your situation.