How to Buy a Home With Little or No Money Down

One of the biggest myths in real estate is that you need a massive down payment to buy a home. While 20% down used to be the gold standard, today’s buyers — especially first-timers — have far more flexible options.

If saving for a big down payment feels impossible, you’re not out of the game. There are ways to buy a home with little or even zero money down, and this guide will show you how.

1. Explore Zero-Down Loan Programs

Yes, these exist — and they’re legit! Here are two of the most popular:

USDA Loans

• $0 down payment required

• Designed for homes in rural and some suburban areas

• Income limits apply, but they’re generous

• Great rates and low mortgage insurance

Bonus: Many properties just outside city limits qualify, even if they don’t feel “rural.”

VA Loans

• For veterans, active-duty service members, and some military spouses

• $0 down with no private mortgage insurance (PMI)

• Competitive interest rates

• Must meet service requirements

If you're eligible, this is one of the most powerful loan options available.

2. Look Into Low Down Payment Loans

If you can’t go zero-down, you may only need 3%–3.5% down with these programs:

FHA Loans

• Backed by the government

• Require 3.5% down

• More flexible with credit scores and debt

• Allows gift money for the down payment

Conventional Loans (First-Time Buyer Programs)

• Some allow as little as 3% down

• Lower mortgage insurance over time than FHA

• Fannie Mae’s HomeReady and Freddie Mac’s Home Possible are great examples

3. Use Down Payment Assistance Programs

Many state, local, and nonprofit organizations offer down payment help in the form of:

• Grants (free money!)

• Forgivable loans

• Second loans with no payments due until the home is sold or refinanced

These programs often work with FHA, USDA, or conventional loans. Ask your lender or agent for local options — you might be surprised what you qualify for.

4. Negotiate for Seller Credits

In some cases, you can ask the seller to cover part of your closing costs. This won’t reduce your down payment, but it can dramatically reduce how much cash you need upfront.

Example: If you need $10,000 for closing, a seller credit of $5,000 cuts your out-of-pocket costs in half.

Final Thoughts

You don’t need to drain your savings to become a homeowner. Whether you're eligible for zero-down loans or take advantage of down payment assistance, there are real paths to homeownership — even if you're not sitting on a 20% down payment.

Thinking of buying soon? Let’s talk through your options and connect you with a trusted lender who can explore the best loan programs for your situation.