Yes. But not the way the ads suggest, and not through some loophole.
There are four legitimate paths to buying with little or nothing out of pocket for the down payment. Each one has real requirements, and knowing which applies to you is the difference between a plan and a wish.
If you are an eligible veteran, active duty service member, or in some cases a surviving spouse, the VA loan is the strongest zero-down product in the market.
No down payment. No monthly mortgage insurance, which is unusual and worth real money every month. Competitive rates. There is a funding fee, which can typically be financed into the loan, and it is waived for veterans with a service-connected disability rating.
If you qualify for this, it is almost always the answer. It is also the benefit most frequently targeted by bait-and-switch marketing, so compare the actual Loan Estimate rather than the advertised rate.
USDA financing offers 100% financing with no down payment, and the eligibility map covers far more ground than the word "rural" suggests. Plenty of ordinary suburban areas outside Chicago qualify.
Two real constraints: the property has to sit in an eligible area, and your household income has to fall under the limit for that county. Those limits are more generous than people expect, particularly for larger households.
This is the path most buyers have never heard of, and it applies to the largest group of people.
Assistance programs provide 3.5% to 5% of the purchase price toward your down payment. On an FHA loan requiring 3.5% down, a 3.5% assistance program covers the down payment completely. You are not saving for it because the program is providing it.
It comes as a grant you never repay, a forgivable second mortgage at 0% with no payment, or a repayable second on a set schedule. You do not have to be a first-time buyer for any of them, and the credit floor is lower than most people assume, generally starting around 640 and in one case reaching 600.
Full breakdown of the structures and what each costs: down payment assistance programs.
Not a program, but it is how a lot of purchases actually happen. Family gift funds are permitted on most loan types with proper documentation showing the money is a gift and not a loan.
One caution: gift funds are not allowed everywhere. Some programs exclude them for reserves, and at least one specialty program excludes them entirely. Ask before you plan around it.
Here is where people get caught, so be clear-eyed about it.
Closing costs are separate. Zero down means no down payment. It does not mean no cash at closing. Seller credits, lender credits and in some cases the assistance itself can cover these, but somebody pays them.
Reserves may still apply. Depending on your score and loan type, you may need one to three months of payments in the bank after closing.
Less equity means less flexibility. Buying with nothing down means starting with little equity. If prices dip, selling in the first couple of years gets harder. That is a real risk and it should factor into your decision, especially if there is any chance you move soon.
Your payment is larger. A smaller down payment means a bigger loan and a higher monthly payment. Zero down is about access, not about the cheapest possible loan.
Most buyers fit exactly one of these, and it is usually obvious once you look at three things: military service, where the property sits, and your income against the county limit.
If you are not sure which applies, that is a short conversation rather than a research project. Tell me whether you have served, roughly where you are looking, and your approximate income, and I can tell you which of these four is realistically open to you.
Related reading: how much down payment do you actually need and down payment assistance programs. If you already own a home and are buying the next one, look at buy before you sell.
Dan Frio is a federally registered mortgage loan originator with PBT Bancorp, NMLS #257781. Able to assist borrowers with mortgage financing nationwide. Serving Chicago, Kane County and the Fox Valley.
Dan Frio | NMLS #246527 | PBT Bancorp | NMLS #257781 | 524 Main St, Hazard, KY 41701 | Equal Housing Lender
Program details are general, vary by program, loan type, county and property, and are subject to change without notice. This is not a commitment to lend and not all applicants will qualify.
