How to Buy a House With No Money Down (2026 Options)

Most guides to buying with nothing down stop at the list of programs. The list is the easy part, and it has barely changed in a decade. DollarVisor takes no lender money, so we can tell you the part the list leaves out: what each program charges you instead of a down payment, and what that substitute costs over the years you actually own the house.

That matters more in 2026 than it used to. The median first-time buyer now puts down 10 percent, the highest share since 1989, according to the National Association of Realtors. Going to zero puts you further from the pack than it once did, and every loan option prices that distance.

1. What “No Money Down” Actually Means

Quick Answer: No money down means no down payment. It does not mean no cash. You still owe closing costs, prepaid taxes, and the first insurance premium at the table, which run 2 to 5 percent of the price on top of whatever you skip on the down payment itself.

Two different things get bundled under the same phrase, and confusing them is how buyers get to the closing table short of funds.

• Zero down payment. The loan covers 100 percent of the purchase price. Only VA and USDA loans do this on their own.
• Zero cash to close. Nothing leaves your bank account at all. This requires a zero-down loan plus a seller credit, a lender credit, or a grant covering closing costs.

The second is a negotiation, not a loan product. Sellers agree when a house has sat; in a fast market they do not.

2. Every Low- and No-Down Route in 2026

Quick Answer: Six routes let you buy a house with no money down or close to it. Two require zero. The rest bottom out at 3 or 3.5 percent, which assistance programs can cover. Every one replaces the down payment with a fee, an insurance premium, or a second lien. Compare them inside the wider mortgage landscape first.

Read the last two columns first. That is where the routes actually differ.

3. VA Loans: Zero Down, One Fee, No Monthly Insurance

Quick Answer: A VA loan is the cheapest way to buy a house with no money down, because it is the only zero-down loan with no monthly mortgage insurance. You pay a one-time funding fee of 2.15 percent on a first purchase with nothing down, and that is it. Check the VA loan eligibility rules before you assume you qualify.

On a $350,000 house the fee is $7,525, and most buyers roll it into the loan. That is real money, but it is one charge instead of a stream. USDA and FHA borrowers keep paying monthly for decades.

Three details that change the arithmetic:

• The fee drops sharply with a small down payment. VA charges 2.15 percent under 5 percent down and 1.5 percent at 5 percent or more. Putting down $17,500 cuts the fee by roughly $2,500.
• Many borrowers pay nothing at all. Veterans receiving compensation for a service-connected disability are exempt from the funding fee outright, as are certain surviving spouses and Purple Heart recipients on active duty.
• The second use costs more. After the first time, the fee jumps to 3.3 percent with nothing down.

One limit worth knowing: on a purchase loan, VA lets you finance only the funding fee. Every other closing cost has to be paid in cash or covered by a credit, and seller concessions are capped at 4 percent of the home’s reasonable value.

4. USDA Loans: Zero Down If the Address Qualifies

Quick Answer: USDA guaranteed loans finance 100 percent of the appraised value with no down payment, no credit-score floor set by the agency, and no first-time-buyer requirement. The cost is a 1 percent guarantee fee upfront and a 0.35 percent annual fee that never ends. Confirm the address and income limits in our USDA loan requirements guide.

The word “rural” misleads people. USDA’s own January 2026 program briefing puts more than 92 percent of US land mass inside eligible territory, including plenty of small towns within commuting distance of mid-sized cities. The binding constraint is usually income, not geography.

What the program actually requires:

• Household income at or under 115 percent of area median. This counts every adult in the house, not just the borrowers.
• Standard ratios of 29 percent housing and 41 percent total debt. A waiver to 32 and 44 percent is available with a 680 credit score and a compensating factor.
• Thirty-year fixed only. No adjustable rates, no balloons, no prepayment penalties.
• A modest, owner-occupied home. Income-producing property is out; hobby farms and home offices are fine.

Seller contributions are capped at 6 percent of the sale price, the most generous limit of any zero-down route. That is how USDA buyers get to genuinely zero cash.

5. Down Payment Assistance: Borrowing the Down Payment

Quick Answer: Down payment assistance pairs a normal FHA or conventional loan with a grant or second mortgage that covers the 3 to 3.5 percent minimum. It is how most non-veterans reach zero out of pocket. Every program is run by a state or local agency with its own income and price caps, listed on HUD’s state homebuying pages.

Assistance comes in three shapes, and the difference matters when you sell:

1. Outright grant. Never repaid. Rare, capped, and usually first come first served.
2. Forgivable second lien. Forgiven over a set occupancy period, often five to ten years. Sell early and you repay a share.
3. Repayable second lien. A real loan with a real payment, either deferred until you sell or amortized alongside the first mortgage.

The third kind is the one buyers misread. A deferred second is still a debt against the house. It gets paid out of your sale proceeds before you see a dollar, and it sits on top of a first mortgage you took at 96.5 or 97 percent of value.

Some buyers skip assistance because a relative helps instead. The paperwork is strict, so read the down payment gift rules before the money moves.

6. What Zero Down Does to Your Monthly Payment

Quick Answer: On a $350,000 house at 6.76 percent, going from 20 percent down to zero adds roughly $500 to $600 a month in principal, interest, and mortgage insurance. A VA loan costs about $2,321 a month; the same house with 20 percent down costs about $1,818. Run your own numbers in our mortgage calculator.

The figures below use the 30-year average of 6.76 percent reported in Freddie Mac’s Primary Mortgage Market Survey for September 10, 2026, with each upfront fee financed. Taxes and homeowners insurance are excluded because they are identical across routes.

Notice how tightly the bottom four cluster. The 3 percent conventional buyer pays more per month than the zero-down VA buyer, because PMI at 97 percent loan-to-value outweighs the smaller balance.

7. What You Still Need at the Closing Table

Quick Answer: Buy a house with no money down and you should still expect around $13,000 at closing on a $350,000 purchase, covering lender fees, title, and prepaid taxes and insurance. A seller credit can erase most of it. Know which line items are negotiable by reading what closing costs actually cover.

The table below holds closing costs and prepaids constant and varies only the down payment, so you can see how much of the cash requirement is everything else.

The bottom row is the one to negotiate toward. A 3 percent seller credit takes a zero-down buyer from $13,200 to $2,700, which is the difference between buying this year and buying in two years.

8. The Ten-Year Cost of Skipping the Down Payment

Quick Answer: Over ten years, mortgage insurance and guarantee fees cost a USDA buyer about $11,600, an FHA buyer about $17,700, and a 3 percent conventional buyer about $23,800. The VA buyer pays nothing after the funding fee. The FHA premium never cancels under 10 percent down.

These are cumulative totals of the annual insurance or guarantee charge alone, with home prices held flat.

The conventional column carries a caveat that sounds like good news and usually is not. PMI is cancellable, but at flat prices a 3 percent down loan does not reach 80 percent of original value until around month 137. That is year 11, one year past the end of this table. Lenders must honor a cancellation request at 80 percent and drop it automatically at 78 percent, but the schedule gets you there slowly. Rising prices speed it up, which is why buyers should know how to get rid of PMI early.

9. The Risk Nobody Prices: Selling in the First Five Years

Quick Answer: Start at 100 percent loan-to-value and you are still near 96 percent after five years of on-time payments. Selling costs alone run 6 to 8 percent of the price, so you need meaningful appreciation just to walk away even. That exposure, not the monthly payment, is the real cost of zero down. It belongs in your affordability math.

Amortization is brutally slow in the early years at current rates. On the modeled VA loan, five years of payments takes the balance from $357,525 to roughly $335,700, which is still about 96 percent of the $350,000 purchase price. The 20 percent down buyer is at 75 percent.

What that gap means in practice:

• A flat market becomes a loss. Sell at $350,000 with 6 percent in agent and transfer costs and the zero-down seller brings money to closing.
• A job move gets expensive. The buyers most likely to relocate early, younger households and service members, are also the most likely to use zero-down loans.
• Refinancing is limited too. Most refinance options want equity you will not have for years.

None of this makes zero down wrong. It makes it a bet on staying put. Plan on five to seven years, or accept that a short hold could cost you. If the stretch also strains the budget, you risk becoming house poor on top of it.

10. How to Decide Between Buying Now and Saving Longer

Quick Answer: Work it as four checks, in order: eligibility, cash to close, the payment against your income, and your expected hold period. If all four clear, buying a house with no money down is a reasonable choice. If the hold period is short, saving longer usually wins, as our rent versus buy math shows.

The four-step check before you commit

Give this about an hour. It costs nothing and it settles the question.

1. Test eligibility for the two free-standing zero-down loans. Request a VA Certificate of Eligibility if you served, and run the property address through USDA’s eligibility map. Both are free and take minutes.
2. Add up the cash you will actually need. Closing costs plus prepaids, not the down payment. If the number exceeds your savings, the question becomes how large a seller credit you can negotiate.
3. Price the payment against your gross income. Use the full payment including insurance and taxes. If it clears 28 percent of gross income, the zero-down version is likely too much house.
4. Name your hold period honestly. Under five years, the savings route usually wins. Five years or longer, buying now with nothing down is defensible.

Your credit profile changes step three, because PMI pricing moves sharply with score. Check where you land on the credit score needed to buy a house before assuming the modeled figures apply to you.

11. The Bottom Line

Quick Answer: You can buy a house with no money down in 2026 through a VA loan, a USDA loan, or a low-down loan paired with assistance. VA is the cheapest by a wide margin. USDA is next if the address qualifies. Assistance works for everyone else, at the price of a second lien.

Zero down suits people who can afford the payment but not the lump sum, and there are a lot of those people right now. It is not a way to buy more house, and it does not avoid the cost of a down payment. It pays that cost differently, over a longer period and usually for more.

If you have VA entitlement, use it. If the address is USDA-eligible and your income fits, that is the next-best door. Everyone else should compare a 3 percent conventional loan against an FHA loan with assistance, and pick on the ten-year insurance cost rather than this week’s rate.

12. Frequently Asked Questions

1. Can you really buy a house with no money down in 2026?

Yes. VA loans and USDA guaranteed loans both finance 100 percent of the purchase, and neither requires a down payment. You still owe closing costs unless a seller credit, lender credit, or grant covers them.

2. What credit score do you need to buy a house with no money down?

Neither VA nor USDA sets a minimum score, but lenders apply their own overlays, commonly in the low-to-mid 600s. A stronger score mainly buys a better rate rather than access to the program.

3. Is a VA loan or a USDA loan cheaper?

VA, in almost every case. VA charges a one-time funding fee and no monthly mortgage insurance. USDA charges a smaller upfront fee but adds 0.35 percent a year for the life of the loan.

4. Can I use down payment assistance with an FHA loan?

Yes, and it is the most common pairing. State and local agencies offer grants or second liens that cover FHA’s 3.5 percent minimum. Each program sets its own income caps, price limits, and repayment terms.

5. Do I need to be a first-time buyer?

Not for VA or USDA. Neither limits itself to first-time buyers. Many state assistance programs do, though several count anyone who has not owned a home in the past three years.

6. What are the downsides of buying a house with no money down?

A higher monthly payment, a larger loan balance, and almost no equity for the first several years. If you sell within five years, selling costs can exceed your equity and you may owe money at closing.

This article is for general information and is not financial advice. Program rules, fees, and rates change. See our disclaimer.