How to Buy a House With No (or Almost No) Money Down

Saving 20% is not the only way to buy a home. Some eligible buyers can use a zero-down mortgage; others may combine a smaller down payment with approved assistance or gifts. Before relying on any option, separate the down payment from the costs you still need to pay.

Quick answer

Eligible VA borrowers and qualifying USDA buyers may obtain a mortgage with no down payment, subject to program, property and lender requirements. Zero down does not mean zero cash to close: costs, prepaids and possible reserves still matter. Other buyers may qualify for low-down-payment loans, documented gifts or assistance, but these cannot automatically be combined or assumed to cover every expense.

What you'll learn

The two true zero-down loan programs and who gets them
When low-down-payment loans and assistance can work together
Gift funds, seller credits, and lender credits explained
The honest trade-offs of putting less down

Zero down payment does not mean zero cash to close

The down payment is only one part of the budget. Even when a loan permits 0% down, closing costs, prepaids, tax and insurance deposits, and program-required reserves may remain. A seller credit generally covers permitted costs, not the required down payment.

To compare with a low-down-payment purchase, use the same $500,000 example from our cash guide: $17,500 down + $12,000 costs and prepaids − $5,000 already deposited − $3,000 permitted credits = $21,500 still due at closing. This is illustrative, not an offer or a figure for every loan.

See the full example breakdown Compare down payment options Understand down payment assistance

The Two True Zero-Down Loans

Only two mainstream programs lend 100% of the purchase price:

VA loans — for eligible veterans, active-duty service members, and some surviving spouses. Zero down, no monthly mortgage insurance, competitive rates. If you're eligible, this is almost always the first option to price out.
USDA loans — zero down in designated rural areas. Most of urban LA County doesn't qualify, but outlying parts of Riverside, San Bernardino, and Kern County can. Income limits apply.

VA eligibility is broader than many veterans realize — including National Guard and Reserve service. It costs nothing to check your Certificate of Eligibility.

When assistance, gifts and credits can be combined

If a zero-down program does not fit, ask which combinations your first mortgage and assistance program permit:

Start with a low-down-payment first mortgage — FHA at 3.5% down, or a conventional loan at 3% for qualifying buyers.
Check assistance eligibility, funding and repayment terms. CalHFA MyHome is a deferred loan, not free money; confirm the current amount and compatible first mortgage through an approved lender.
Cover closing costs with credits — a seller credit negotiated into your offer, a lender credit in exchange for a slightly higher rate, or both.
Fill any remaining gap with gift funds from family.

Do not commit to a purchase assuming assistance is approved. Seller credits cannot simply replace a required down payment, and lender credits can increase the interest rate.

Gift Funds: Simpler Than People Think

Every major loan program allows your down payment to be partly or fully a gift from a family member. The mechanics are simple: the giver signs a short letter confirming it's a gift and not a loan, and the transfer is documented so underwriting can trace it. That's it. What trips people up is undocumented cash — money moving without a paper trail is the one version underwriters can't use. If family plans to help, loop your loan officer in early so the transfer happens the clean way.

Seller Credits and Lender Credits

Closing costs — lender fees, title, escrow, prepaid taxes and insurance — typically run 2% to 3% of the price, and they can be covered by someone other than you:

Seller credit: the seller agrees to pay part of your closing costs as a term of the offer. In a balanced or slow market this is a normal ask, especially on homes sitting more than a few weeks.
Lender credit: you accept a modestly higher interest rate and the lender pays costs in exchange. Sensible if cash today is tighter than payment tomorrow — and you can refinance later if rates improve.

The Honest Math of Putting Less Down

Putting less down generally leaves a larger balance and payment. Mortgage insurance may also apply: conventional PMI cancellation and FHA MIP duration follow different rules, so do not assume either ends automatically when your home gains value. Keeping savings can help with repairs and emergencies, but less initial equity also gives you less protection if prices fall. Compare the full monthly cost and your remaining savings before choosing; buying is not always better than waiting.

Gimmicks to Walk Past

A few things dressed up as zero-down help that deserve skepticism:

“No money down, no credit check” seller-financing ads — often lease-options where you can lose every dollar paid if a technicality trips you.
Borrowing your down payment from a personal loan or credit card — underwriting will spot it, and it usually kills the file.
Paying a fee upfront to “unlock” grant money — real programs never charge you to apply for assistance.

Key takeaways

VA loans offer true $0 down for eligible veterans — often the best deal in the market.
FHA (3.5% down) plus down payment assistance can shrink your cash to closing dramatically.
Family gift funds are allowed on every major loan type, with a simple letter.
Seller and lender credits can cover most closing costs in the right market.
Less down means a bigger payment and mortgage insurance — run the numbers both ways.

Common questions

Can I really buy a house with zero down?

Some eligible VA or USDA borrowers can buy with 0% down, subject to underwriting and property rules. That does not eliminate closing costs or prepaids. Other buyers may qualify for permitted assistance and gifts, but no combination is guaranteed to eliminate the cash needed.

How much cash do I actually need to close on a low-down purchase?

Add the required down payment, closing costs and prepaids, then subtract deposits already paid and permitted credits or confirmed assistance. Keep any required reserves separate. In our illustrative $500,000 purchase, $17,500 + $12,000 − $5,000 − $3,000 leaves $21,500 due at closing; your actual figures may differ.

Is it a bad idea to put less money down?

It's a trade-off, not a mistake. You'll carry a bigger payment and mortgage insurance, but you keep savings in reserve and start building equity sooner. For many renters, the comparison that matters is against another year of rent — run both sets of numbers.

Can my whole down payment be a gift?

On FHA loans, yes — 100% of the down payment can be gift funds from a family member with a simple gift letter and a documented transfer. Conventional loans allow full gifts in most owner-occupied scenarios too.

Do zero-down options exist for self-employed buyers?

Self-employed buyers must meet the selected program's income and eligibility rules. A bank-statement loan is not automatically eligible for zero down or the same assistance as an agency loan. Confirm the required down payment and permitted assistance for the specific program.