If you buy a $250,000 home as a first-time buyer, a $25,000 down payment may seem like an inevitability. In fact, not everyone makes a 10% payment up front. The average today is 6%,1 but your mortgage broker will discuss the best options.

The truth is, home loans, including an FHA loan, may be within reach with a low down payment. Buyers have gotten fair FHA mortgage rates with just 3.5% down, or even less.

How a Zero Down Payment Mortgage Works

There are a few ways to secure a mortgage loan with no down payment. While you attain ownership, you won’t build equity. It can come in useful when repairs are needed. The loan also generally takes longer to pay off.

For a mortgage with nothing down, here are types of home loans to consider:

USDA Loans: Homeowners in rural and low-density areas can qualify, even if they have a lower-than-average credit score. Options include single-family direct homeownership loans and single-family guaranteed homeownership loans.

VA Loans: If you’re a veteran with good credit and sufficient income, you may qualify. You also need a Certificate of Eligibility from the U.S. Department of Veterans Affairs, but you can avoid high closing costs and a private mortgage insurance premium.

Work with Your Mortgage Company

Elite Financial can help with mortgages and FHA loans or if you want to refinance. If a down payment is preventing you from pursuing the home of your dreams, we can help there, too. Many other options are available, from when you’re starting out to later seeking a fixed rate mortgage, cash out refinance, or a rate and term refinance.

Contact us online for a quote or call (805) 494-9930 for assistance.


  1. https://themortgagereports.com/11306/buy-a-home-with-a-low-downpayment-or-no-downpayment-at-all