These days, saving money has become harder than ever. With wages stagnating, and expenses on the rise, not many first time home buyers have enough saved to make a 20% down payment. Even those that do may not have enough left over to feel comfortable in their home should anything go wrong.
Lenders understand this. That’s why both lenders and lawmakers have created home loans that require either no down payment, or a low down payment (less than 5% down). By law, there are certain qualification requirements attached to these programs, but many of these loans are easily available and a great option for those who have not yet saved enough.
Current National Low/No Down Payment Loans
Note: Some states have their own low down payment loan available, so always check with your loan originator to see if your state has any interesting programs.
On a national level, several options are available available for those who want to find a home for little to nothing down. These include:
VA Loans – No Down Payment
For active military, veterans, and their spouses, VA loans are a great choice for purchasing a home. These loans cover 100% of the loan (and can provide additional income for renovations).

In addition, they are less affected by credit score or bankruptcy, and do not require mortgage insurance.
USDA Loans – No Down Payment
USDA loans also require no down payment. These are also known as “rural development loans.” They are home loans for what the government considers “rural areas,” in an effort to improve home ownership and growth in smaller towns.

Some suburbs are still considered to be rural areas, even if they wouldn’t be seen that way from a traditional standpoint, so it is always a good idea to check with your loan originator and see if your home qualifies. These loans can cover 100% of the mortgage (with some limitations), they can include some home upgrades, and may have a lower interest rate.
HomeReady Loans – 3% Down
HomeReady Loans are not very well known, but they are available to nearly every lender. These loans are a very unique type of mortgage loan. They cover 97% of the loan amount, allow you to include other people living in the home (like roommates) to qualify for a better home loan, and it is available to first time home buyers AND repeat home buyers. The only limitation is that the homes must be in “high minority census tracts,” to encourage home ownership in population dense areas.

FHA Loans – 3.5% Down
FHA loans are the most well-known and common low down payment loan. Backed by the Federal Housing Authority, FHA loans have a minimum FICO requirement, and require private mortgage insurance (PMI) to help guarantee the loan. But they have no location requirements (you can buy the home in any city in the United States) and are available for low to medium income households.

Low Down Payment Conventional Loans – 3% Down
Low down payment conventional loans are also an option in select areas. Loans cannot exceed $424,100, and the mortgage must be a fixed rate mortgage, but this type of mortgage allows you to buy a home with a very low down payment that can even be a gift from a blood relative.

Navigating the Low Down Payment/No Down Payment Home Mortgage Options
Low down payment loans can be difficult to navigate. But they are available. To find out if you qualify for a low down payment mortgage, contact Open Mortgage today.