Best Low and No Down Payment Mortgage Lenders of 2025
Summary: Mortgage Lenders For Low And No Down Payments
We compared each lender’s advertised interest rate (or customizable rate, when available) for a conventional 30-year fixed-rate mortgage, based on a $400,000 home purchase price with 5% down and an excellent credit score (740+), to the national average 30-year fixed-rate reported by Freddie Mac at the time of writing. Lender rates at least five basis points (.05%) below Freddie Mac were deemed “below the national average.”
How To Get the Best No or Low Down Payment Mortgage
Even though zero-down home loans provide an entry point for people who need support with home affordability, prospective home buyers still need to meet certain eligibility requirements to qualify.
While only specific borrowers can qualify for certain loans, such as with U.S. Department of Veterans Affairs (VA) and U.S. Department of Agriculture (USDA) loans, countless other loan programs can help you afford a home. Here are some tips to put you in the best position to qualify and get the most advantageous terms.
- Research down payment assistance programs. Many lenders support borrowers applying for down payment assistance or cash grants to help cover their down payment fully or in part. There are several thousand DPA programs nationwide, mostly funded by federal, state and local government agencies. However, some banks, credit unions and local charities run similar programs that can help you save thousands of dollars toward a home purchase.
- Boost your credit score. Though most no and low down payment home loans don’t require a solid credit score, many lenders prefer that you have at least a score of 620. So, to ensure you have access to as many loan programs as possible, take steps to lift your credit, such as reducing your debt and paying your bills on time. Doing so may also help you get a reduced rate.
- Consult a housing counselor. Shopping for a home—especially if you’re a first-time home buyer—can be overwhelming. The good news is that you can consult a housing counselor for advice. Check out the Department of Housing and Urban Development’s directory for a participating housing counseling agency in your area.
- Shop several lenders. Compare loans and programs from at least three lenders and see where you get the most competitive interest rates and fees. Research has shown that comparing the offerings of multiple lenders can potentially save borrowers up to $1,200 per year. Also, ask if the lender charges a prepayment penalty to avoid extra costs if you think there’s a possibility you’ll pay off your mortgage early.
- Maximize your savings for a down payment. A larger down payment will help lower your monthly mortgage payment. It’ll also put you in a better position to get a lower interest rate. So, see if there are ways to sock away extra cash ahead of time. Some strategies include taking on a side hustle, reducing spending, moving back home or taking on a roommate.
How To Buy a House With No Money Down
There are a couple of mortgage programs that offer 100% financing. Since these loans have no down payment requirement, first-time home buyers generally have an easier time qualifying for them. If you’re looking to buy a house with little or no down payment, consider the following options and compare several lenders to find the best rate.
Types of Mortgage Loans With No Down Payment
These two government-backed loan programs don’t require a down payment:
- VA loan. VA loans don’t require a down payment when the sales price is lower than the home appraisal value. This loan program is exclusively for U.S. military members, veterans and their families.
- USDA loan. USDA loans are for home buyers in eligible rural areas across the U.S. Applicants must also have a low to moderate income to qualify for financing.
Typically, conventional loans require a minimum down payment, but select lenders waive the requirement for eligible borrowers. One lender to consider is Navy Federal Credit Union. Its Homebuyers Choice and Military Choice loan programs don’t require a down payment or private mortgage insurance.
Types of Mortgage Loans With Low Down Payment
Several home purchase loan programs require as little as 3% down to qualify:
- Conventional mortgage. A conventional home loan may require as little as 3% down, but you’ll typically need a 20% down payment to waive PMI costs.
- Fannie Mae HomeReady: A HomeReady loan only requires a 3% down payment. Income restrictions apply, but first-time and repeat home buyers are eligible.
- Federal Housing Administration (FHA) loan. The minimum down payment for an FHA loan is 3.5% with a credit score above 580 and 10% for credit scores from 500 to 579.
- Freddie Mac Home Possible. This loan program only requires 3% down and gives borrowers with a low or very low income the opportunity to own a home.
Lenders and government agencies may also offer down payment assistance programs and first-time home buyer grants, making it easier to meet the financing requirements.
Pros and Cons of Low and No Down Payment Mortgage Lenders
Before you start shopping around for a low down payment home loan, consider the main benefits and drawbacks of these programs.
Pros
- Flexible credit and income requirements
- May combine with down payment assistance programs and grants
- Repeat home buyers can qualify
- Ability to utilize cash reserves for other financial priorities
Cons
- Subject to mortgage insurance premiums or higher rates
- Higher monthly mortgage payment
- Low home equity
- Income restrictions may apply
Methodology
We graded based on features that have a meaningful impact on the cost of a mortgage and a borrower’s experience, including interest rates, loan options, accessibility, closing time and customer service.
We award bonus points if a lender offers a specialty rate discount, a home equity product or maintains a fully online mortgage application process.
Our scoring method is broken down as follows:
- Loan options. 25%
- Interest rate. 20%
- Accessibility. 20%
- Customer service experience. 20%
- Time to close. 15%
- Bonus points. Up to 15 points
We chose to focus on these core elements to bring forward lenders that offer the most competitive rates while also providing a satisfactory customer experience accessible to borrowers of all financial backgrounds. We believe this scoring system best reflects consumers’ top priorities when comparison shopping for mortgage lenders.
To learn more about our rating and review methodology and editorial process, check out our guide on How Forbes Advisor Reviews Mortgage Lenders.
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Frequently Asked Questions (FAQs)
Can you get a VA home loan with no down payment?
Yes. There’s no down payment requirement if the appraisal value exceeds the sales price.
What is the credit score required to buy a house with no down payment?
Most lenders require a minimum 620 credit score to qualify for a zero-down home loan. However, credit requirements differ by lender and program; the score can be as low as 580 or may start as high as 640.
What is the average down payment on a house?
The nationwide average down payment for a house was 14.4%—an average median of $34,248—during the second quarter of 2023, reports Hannah Jones, an economic data analyst at Realtor.com.
When do you pay the down payment on a house?
The entire amount is due at closing, but you’ll likely have to make an initial deposit—known as earnest money—after the seller accepts your purchase offer. The earnest money is then applied to the down payment at closing.
Which type of mortgage does not require a down payment?
VA and USDA-backed loans require no down payment when the home appraisal value is lower than the loan amount. Each loan program has unique borrower eligibility requirements.
Alternatively, you can look to conventional first-time home buyer loans, which require as little as 3% down.
Can you get a low or no down payment mortgage with bad credit?
Yes, there are several mortgage options if you have poor credit. FHA loans have down payments as low as 3.5% with a credit score of at least 580 or 10% with a score between 500 and 579.
VA loans are another option. The VA doesn’t set a minimum credit score or down payment requirement, but many lenders do. Typically, you’ll need a credit score of at least 580 to qualify for a VA loan.
