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Low Down Payment Loans

Saving enough money for a down payment can be one of the biggest barriers to homeownership for first-time homebuyers. The truth is, you have options when it comes to your down payment amount.

While many people think that the standard down payment amount is 20%, you can actually get a home for less money out-of-pocket. There are many low or even no down payment mortgage options available to help make your dream of homeownership a reality.

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First-Time Buyers

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No Down Payment Mortgage Programs

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USDA Loans

Backed by the U.S. Department of Agriculture, USDA loans offer 100% financing for lower-income home buyers purchasing a home in rural areas. Borrowers aren’t required to make a down payment, but they will be responsible for a 1% guarantee fee that can be rolled into closings costs as well as monthly mortgage insurance.


VA Mortgage Loans

The Department of Veteran Affairs offers no down payment loans to active duty military, veterans, and their spouses. VA loans are an excellent option for eligible borrowers since they don’t require any monthly mortgage insurance. However, VA loan borrowers may have to pay a one-time funding fee that can be rolled into the loan cost.

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FHA Loans

FHA loans are insured by the Federal Housing Administration, which provides protection for the lender in case the borrower defaults on the loan. Because of this, borrowers can qualify for a loan with just 3.5% down. Be aware that you’ll need to pay mortgage insurance as an upfront fee at closing and as part of your monthly mortgage payment.

Eligibility Requirements for an FHA Loan:

  • Must meet minimum credit score requirements and at least 3.5% down payment
  • The purchased property must be your primary residence
  • The property must meet the FHA’s minimum property standards

HomeReady™ Mortgage

Backed by Fannie Mae, HomeReady loans are open to both first-time and repeat homebuyers and require a minimum down payment of 3%. Borrowers will need to pay private mortgage insurance (PMI) when putting less than 20% down. HomeReady is unique in that non-occupant borrowers are permitted. For example, family members who will not be living in the home, such as parents, can be co-borrowers and help their children qualify for the loan.

Eligibility requirements:

  • Have a minimum credit score of 620 and at least 3% down payment
  • Your income must be equal to or less than 80% of your county’s area median income (AMI)
  • If ALL borrowers who will occupy the home are first-time homebuyers, then at least one borrower must complete homeownership education
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Conventional 97

Both Fannie Mae and Freddie Mac offer loan programs that allow borrowers to put down 3% of the home’s purchase price. Conventional loans do not require an upfront insurance fee like FHA loans do, but if you put less than 20% down, you’ll be required to pay monthly private mortgage insurance (PMI).

Eligibility requirements:

  • Have at a minimum credit score of 620 and least 3% down payment
  • At least one buyer has not owned a home in the last three years
  • The property must be a single-unit dwelling
  • The loan limit is at or below $510,400
  • Must be a fixed-rate mortgage. Adjustable-rate mortgages are not allowed.

Talk to a Loan Expert

Get in touch with a mortgage expert who can help you find the right low down payment options.

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Johnny Kellogg

Loan OfficerNMLS#: 1667177
Licensed to originate:
I am authorized to do business in the state of Colorado.