Can You Buy a House With No Money Down? 5 Mortgage Options Explained

Buying a home is exciting, but saving thousands of dollars for a down payment can feel overwhelming. What if you have a steady income, decent credit, and enough money to afford monthly mortgage payments, but very little saved?

The good news is that buying a house with no money down is possible through certain mortgage programs.

Before starting your search, understanding the homebuying timeline from pre-approval to closing can help you prepare for each stage.

Can you buy a house with no money down? Yes. Qualified homebuyers can purchase a house without a down payment through USDA loans, VA loans, or certain financing programs combined with down payment assistance. However, eligibility depends on your finances, location, and loan requirements. Closing costs and other expenses may still apply.

Let's explore five mortgage options that could make homeownership more affordable.

1. USDA Loans: Buy a House With No Down Payment

USDA home loans are one of the most popular zero-down mortgage options for eligible buyers in rural and certain suburban communities.

These government-backed mortgages help qualifying low- and moderate-income households purchase primary residences.

Who qualifies for a USDA loan?

Generally, borrowers must:

• Purchase a home in a USDA-eligible area.
• Meet household income limits.
• Demonstrate sufficient income and acceptable creditworthiness.
• Use the home as their primary residence.

Example: Sarah earns $58,000 annually and wants to purchase a $230,000 home outside Greenville, South Carolina. She has steady employment but only $3,000 saved.

If she and the property meet USDA requirements, she could qualify for 100% financing without a down payment.

Buyers can check addresses using the USDA Property Eligibility Map.

2. VA Loans: Zero-Down Mortgages for Military Borrowers

VA home loans are available to eligible veterans, active-duty service members, and certain surviving spouses.

Benefits include:

• No down payment in many cases.
• No monthly private mortgage insurance (PMI).
• Competitive interest rates.
• Flexible qualifying guidelines.

Example: James, an eligible veteran, purchases a $300,000 home. Instead of saving $15,000 for a 5% down payment, he may qualify to finance the entire purchase price.

Some borrowers must pay a VA funding fee, although exemptions are available.

3. FHA Loans: Low Down Payments With Assistance

FHA loans are not technically zero-down mortgages, but they can help buyers with limited savings.

Borrowers with credit scores of at least 580 may qualify for a 3.5% down payment. Those with scores between 500 and 579 generally need at least 10% down, and lenders may impose stricter requirements.

Example: Maria purchases a $200,000 home with an FHA loan. Her required 3.5% down payment equals $7,000.

If she qualifies for an approved assistance program providing $7,000, she may be able to cover that down payment without using personal savings.

FHA mortgage insurance and other expenses still apply.

4. Conventional Loans: As Little as 3% Down

Certain conventional mortgages, including Fannie Mae HomeReady and Freddie Mac Home Possible, allow qualifying borrowers to purchase homes with as little as 3% down.

For a $250,000 home, that means $7,500 upfront.

Some buyers may combine eligible conventional financing with grants or assistance programs.

Remember that how interest rates affect your mortgage payment is just as important as the down payment.

Conventional loans with less than 20% down generally require private mortgage insurance.

5. Down Payment Assistance Programs

First-time homebuyer assistance programs can help eligible borrowers cover down payments and sometimes closing costs.

Assistance may include grants, forgivable loans, deferred-payment loans, or repayable second mortgages.

Some programs are also available to repeat buyers.

Can You Buy a House With No Money Down in South Carolina?

South Carolina buyers can explore USDA and VA loans alongside assistance opportunities offered through SC Housing.

Buyers in Greenville, Spartanburg, Anderson, and surrounding communities may qualify depending on income, property eligibility, and program requirements.

North Carolina buyers can also investigate programs through the North Carolina Housing Finance Agency.

Program availability and assistance amounts change, so always verify current requirements.

How Much Money Do You Actually Need to Buy a House?

Even with a zero-down mortgage, you may need money for inspections, appraisals, insurance, and closing costs.

Closing costs commonly range from approximately 2% to 5% of the purchase price.

On a $250,000 home, that could mean $5,000–$12,500.

Understanding what homebuyers actually pay in closing costs helps prevent surprises.

You should also understand what makes up your monthly mortgage payment (PITI), including principal, interest, taxes, and insurance.

Zero Down vs. 5% Down: A Realistic Example

Consider a $250,000 home with a hypothetical 6.5% interest rate and a 30-year fixed mortgage.

Illustrative calculations, rounded to the nearest dollar. Excludes mortgage insurance, program fees, taxes, homeowners insurance, and closing costs. Actual loan pricing and eligibility vary.

A zero-down mortgage preserves savings but increases the amount borrowed and, in this example, the monthly principal-and-interest payment.

How to Buy a House With No Money Down: 5 Steps

1. Determine your budget. Start by calculating how much house you can actually afford, including ongoing housing expenses.
2. Check mortgage eligibility. Review your credit, income, debts, and potential USDA, VA, or assistance program qualifications.
3. Compare lenders. Ask about zero-down mortgages, assistance programs, interest rates, and closing costs.
4. Get pre-approved. Understanding the difference between pre-approval and pre-qualification helps you prepare for mortgage shopping.
5. Find an eligible property. Work with your real estate agent and lender to confirm the home meets loan requirements before closing.

What Credit Score Do You Need for a Zero-Down Mortgage?

There is no universal credit score requirement for every no-down-payment mortgage.

USDA and VA programs do not establish a single minimum credit score for all borrowers, although individual lenders may have their own standards.

Lenders also review income, employment, existing debt, and payment history.

Understanding the 10 common reasons mortgage applications get denied and how to avoid them can help you strengthen your application before applying.

Is Buying a House With No Money Down a Good Idea?

Zero-down financing can help buyers purchase sooner while preserving savings for emergencies.

However, borrowing more means higher loan balances, potentially higher monthly payments, and less initial home equity.

First-time buyers should also understand the 15 biggest first-time homebuyer mistakes and how to avoid them before committing to a mortgage.

The best financing option should fit both your current budget and long-term financial goals.

The Bottom Line: Homeownership May Be Closer Than You Think

Buying a house with no money down is possible, and you may have more mortgage options than you realize.

Whether you qualify for a USDA loan, VA loan, low-down-payment mortgage, or assistance program, understanding your choices can help you make a confident decision.

Once you find the right home, learning what happens after your offer is accepted can help you prepare for inspections, financing approval, and closing.

Ready to explore homeownership?

Contact Bluefield Realty Group to connect with experienced real estate professionals who can help you find a home that fits your needs and budget.

Frequently Asked Questions About No-Money-Down Mortgages

Can I buy a house with no money down and a 600 credit score?

Possibly. Certain USDA and VA lenders may consider applicants with a 600 credit score, depending on their financial circumstances and lender requirements.

Can I buy a house with no savings?

It may be possible if eligible assistance, seller concessions, or lender credits cover upfront expenses. However, maintaining emergency savings is strongly recommended.

Are there first-time homebuyer grants in South Carolina?

Eligible buyers may find assistance through SC Housing and other programs. Some assistance must eventually be repaid, so review the terms carefully.

What is the difference between zero down and no closing costs?

Zero down means no down payment is required. No closing costs means those expenses are covered, credited, or financed through an allowable arrangement rather than paid separately at closing.

Can I use down payment assistance with an FHA loan?

Yes, qualifying FHA borrowers may use approved assistance programs, provided the funding source and transaction meet FHA requirements.