Zero-Down Mortgage Options 2025: How to Buy a Home with No Money Down

Dreaming of homeownership but struggling to save a down payment? You’re not alone. In 2025, there are still legitimate ways to buy a home with 0% down — if you know where to look. This guide breaks down everything you need to know about VA and USDA loans, plus state and local assistance programs that can slash or eliminate your upfront costs.

How Zero-Down Mortgages Work in 2025

A zero-down mortgage lets eligible borrowers finance 100% of a home’s purchase price. Instead of putting 3-20% down, you bring $0 to closing (aside from any seller-paid or rolled-in costs). Two government-backed programs dominate this space in 2025:

• VA loans for eligible veterans, active-duty service members, and some surviving spouses
• USDA Rural Development loans for low-to-moderate-income buyers in designated areas

VA Loans: The Gold Standard for $0 Down

Backed by the U.S. Department of Veterans Affairs, VA loans remain the most flexible zero-down option on the market. Key perks include no private mortgage insurance (PMI), lower average rates than conventional loans, and lenient credit guidelines.

VA Loan Eligibility in 2025

Generally, you’ll qualify if you:

• Have served at least 90 consecutive days on active duty during wartime, or 181 days during peacetime
• Have more than six years in the National Guard or Reserves
• Are the surviving spouse of a service member who died in the line of duty or from service-connected causes
• Meet the lender’s credit and income guidelines

Funding Fee & Closing Costs

Most VA borrowers pay a VA funding fee (0.5%-3.3%) instead of mortgage insurance. This fee can be rolled into the loan to keep upfront costs at zero.

USDA Loans: Zero-Down for Rural & Suburban Buyers

USDA loans, backed by the U.S. Department of Agriculture, target households with moderate incomes in eligible rural and suburban areas. Despite the name, roughly 97% of U.S. landmass qualifies, including many small towns and suburbs.

USDA Eligibility Snapshot

• Property must be in a USDA-eligible location (check the interactive map)
• Household income typically ≤ 115% of area median income
• Primary residence only; no vacation or investment properties
• 620-640+ credit score recommended by most lenders

Down-Payment Assistance & Alternative Paths

If you’re not eligible for VA or USDA, you still have options to drastically reduce your upfront cost:

• State Housing Finance Agency (HFA) down-payment assistance grants or forgivable loans
• FHA loans with 3.5% down plus DPA covering the down payment
• Employer-assisted housing benefits
• Community second mortgages
• Gift funds from family

Pros & Cons of Buying with No Money Down

Advantages

• Enter the market sooner and start building equity
• Keep savings intact for emergencies or home improvements
• Potentially secure lower-than-market rates (VA loans)

Drawbacks

• Higher loan amount means higher monthly payment
• Funding fee (VA) or guarantee fee (USDA) adds cost
• Risk of owing more than the home is worth if prices fall

Step-by-Step: How to Get Approved in 2025

1. Check your eligibility using our quick tools below
2. Gather income, asset, and service documentation
3. Compare quotes from at least three VA/USDA-approved lenders
4. Obtain a Certificate of Eligibility (COE) for VA loans
5. Get preapproved to understand your price range
6. Make an offer on an eligible property
7. Complete underwriting and close — often in as little as 30 days

Ready to Unlock Homeownership with $0 Down?

Buying a home with no down payment is possible — and 2025 could be the perfect year to make your move. Whether you’re a veteran leveraging well-deserved benefits or a rural buyer eyeing a USDA loan, understanding the rules and preparing early will set you up for success.

Disclaimer: Mortgage-Info.com may receive compensation from some lenders, but our editorial opinions are our own. Rates and program guidelines are subject to change without notice.