10+ Types of No Down Payment Required Mortgages

Many are familiar with VA loans, and fewer are familiar with USDA loans, each of which provides a mortgage with no down payment required. Many are unfamiliar with specific types of VA loans & USDA loans, & some of the other types of loans available to a broader spectrum of buyers. In this article, I wanted to share about those and some of the many alternatives. I'm also throwing in an option for $100 down loans, & some options where the buyer doesn't need to come up with a down payment, though technically they require a down payment. Please keep in mind that I am not a lender, only a licensed real estate agent.

Typically, but not always, these programs are restricted by minimum credit scores, but some agents like myself can help future buyers with their credit for free prior to purchasing.

3 Conventional loans with no down payment required for 1st time home buyers

Option A:

Langley Federal Credit Union offers a conventional loan with no down payment required for true 1st time home buyers with no income limits. That said, you won't be able to get no down payment on this one if looking to purchase a condo. Also, it's an adjustable rate mortgage.

While there are income limits on the different Homenow program, which is also available for true 1st time home buyers with Garrett Mortgage & Langley, up to 3% closing costs may be financed into that loan in addition to there being no down payment required.

Option B:

Navy Federal also offers a no down payment conventional loan, with a standard option or a jumbo option up to $1,000,000. You don't need to be active duty or a veteran to get it, but active duty do get preferential treatment. If you do get a mortgage with Navy Federal, you may want to request a closing date 40 or more days out rather than the 30 days that many local lenders can do. Also if you can find a local Navy Federal lender who is available on nights and weekends including via text, that's ideal.

Option C: (Only available in Atlanta, Chicago, Charlotte, Dallas and Los Angeles -- with plans to expand in 2023)

"Bank of America Introduces Community Affordable Loan Solution™ to Expand Homeownership Opportunities in Black/African American and Hispanic-Latino Communities...

Bank-provided down payment, no closing-cost mortgage advances efforts to broaden access to homeownership and adds to its existing $15 billion Community Homeownership Commitment."

See also here.

Medical professional (i.e. doctor) loans at many banks

Doctor loans are provided by a number of banks and typically aren't limited exclusively to doctors. These loans provide special financing for those in the health industry. I've seen where these can have an employment start date up to 90 days after closing.

Types of medical professionals

In the case of 1 bank, I saw where these were available to the following occupations:

• Medical Resident

• Medical Doctor (MD)

• Doctor of Dental Medicine (DMD)

• Doctor of Ophthalmology (MD)

• Doctor of Osteopathy (DO)

• Chiropractor (DC) - max LTV 97%

• Medical Fellow

• Doctor of Dental Surgery (DDS)

• Doctor of Optometry (OD)

• Doctor of Podiatric Medicine (DPM)

• Pharmacist (RPH) - without PharmD max LTV 97%

• Doctor of Veterinarian Medicine (DVM

Here are some examples of institutions where "Doctor Loans" are offered, per Student Loan Planner:

Virginia Doctor Mortgage Lenders	0% Down Loan Limit	Who Can Qualify	Unique Features
BMO	Min 5% down	MD, DO, DDS, DMD	Lends in majority of the country
First Horizon Bank	$1.5 million	MD, DO, DPM, OMS	Need at least 670 credit score
First National Bank	$1.25 million	MD, DO, DDS, DMD, DVM	Eastern US focus
Fulton Mortgage Company	$1.5 million	MD, DO, DDS, DPM, DVM, PharmD	Must be US Citizen or have valid Green Card
Huntington Bank	$1 million	MD, DO, DDS, DMD, DVM	Minimum 700 credit score
KeyBank	$1 million	MD, DO, DMD, DPM	Can be used for second home
TD Bank	$1 million	MD, DO, DDS, DMD, DPM, OMS	Requires a DTI of 43%
Truist	$1 million	MD, DO, DDS, DMD, DPM	Within the past 15 years of training
US Bank	Min 5% down	MD, DO	Dentists not eligible

Additional institutions (per Bankrate & other sources) with no money down "doctor loans" include:

• Bank of America

• Fairway Independent Mortgage Corporation

• Fifth Third Bank

• Flagstar Bank

• Guaranteed Rate

• Northpointe

• Novus Bank

• United Community Bank

• Valley Bank

NACA: no down payment, "no" closing costs, below market rates for those below median income or those buying in areas below median income, solid buy-down options, and credit score not considered. This loan is more of a hassle than most others here, but the math checks out in many cases.

While you'll see with this program that it typically takes 3-6 months to go through the qualification process, the numbers, in the end, are good if you're able to use it for a purchase. This program offers a loan with no down payment, no closing costs, and below-market rates. The below market rates are available for both of the following:

A. Households equal to or below median income households for the MSA (not adjusted for household size)

B. Households above median income for the MSA, but purchasing in a census tract that is below the median income for their MSA.

You'll still need to have money for things like a home inspector & for prepaid expenses. Credit score is not considered, but there are some minimum credit element qualifications. Buy-down options are also good with this program. If you have above median income, you may not get the below-market rates, but the rates will still likely be lower than you can get in a number of places.

Caveat:

If you look at the reviews of NACA, the reviews are mixed, in part because of the hoops that need to be jumped through, the fact that it's a non-profit, and the fact that the qualification process can sometimes lead to you thinking you're prequalified but then being refused the loan after getting under contract due to something that wasn't checked prior to you receiving qualification. Some sellers/listing agents may be wary of this fact as well so it may hurt the strength of your offer.

Restrictions include but are not limited to:

1. You'll need to actively contribute to NACA via volunteering every year, but this task can be accomplished as easily as some social media shares.

2. You & those in your household can't own another home at the time of purchase (closing).

3. You will need to be an owner-occupant & can't move out of your home and keep a NACA mortgage; if you wish to leave your home, you'll need to refinance to another product or sell the home.

4. You'll need to work with a NACA qualified buyer's agent (I am one) and a NACA certified home inspector.

5. "The purchase price plus any repair escrow funds (i.e. for repairs to be completed after closing) cannot exceed the approved Maximum Mortgage Amount.  The current limits for 2023 are $548,250 for a single-family home in most areas and up to $822,275 in high cost areas.  There is a considerably higher limit for multi-family properties." (FAQs)

VA Loans for active duty, reserves, & former military

A VA loan is a solid option with no down payment required for Veterans, active-duty service members, National Guard, and Reserve members.

Eligibility:

For service members:

If you’ve served for at least 90 continuous days (all at once, without a break in service), you meet the minimum active-duty service requirement.

For Veterans:

Depends on when you served. It can be anywhere from a minimum of less than 90 days (i.e. 1 day? - see Vietnam War) to a minimum of 24 continuous months.

For National Guard members & Reserve members:

Depends on when you served.

Anywhere from 90 days of active duty (between August 2nd, 1990 to now) to a minimum of 6 creditable years (highest minimum of multiple options prior to then).

There are some exceptions on that site where you can still qualify (i.e. hardship), and some other things that can disqualify you (i.e. dishonorable discharge).

While a funding fee is often, but not always involved of 1.25%-3.3%, that can typically be wrapped into the loan.

USDA loans in rural areas (4 Tiers, Excluding High Income)

While there are area limits, USDA provides no down payment loans throughout the majority of the US in rural areas. Don't assume that it wouldn't be available for you before looking at a map if you have suburban areas near you. In some cases, highly rural areas (i.e. areas of Suffolk, VA) won't qualify, while in other cases, places that many would call put of suburbs, not rural areas (i.e. parts of York & James City County as well as within the center of the town of Smithfield), would qualify.

Image courtesy USDA.gov

Here's how that looks in SE VA, which includes eligibility throughout Isle of Wight County, in parts of York County & James City County, all of Gloucester, & more:

Image courtesy USDA.gov

There are loan limits and income limits, as well as specific criteria for properties such as acreage caps.

Most buyers getting a loan via USDA do so with a traditional lender using the USDA guaranteed loan program.

For those who aren't high income & who meet other criteria, below-market interest rate, and low closing cost USDA direct loans are available. How much lower of an interest rate? As of 12/5/23, they are below the NACA rates, and more than 2.75 percentage points below the prevailing rates. That's 4.5% with USDA direct vs 7.59% with Forbes Advisor's daily interest rate. 7.59/4.75 is 1.60, so typical rates are 60% higher at the moment. Monthly payments could also be lower (& affordability increased with a higher preapproval) with USDA direct vs traditional rates as well if using a 33-year loan where you don't need very low income rather than 30-year loan.

"Very Low Income" opens doors in some cases (i.e. disabled & elderly) to rates as low as 1% spread out across 38 years.

"Low Income" below is for USDA Direct

"Moderate Income" below is for USDA Guanteed Loans

Most of Hampton Roads (Virginia Beach MSA) has higher limits than Southampton County, Franklin City, & King & Queen County. Eligible areas closer to Richmond have higher limits than Hampton Roads.

Per the Delineation File titled "Core based statistical areas (CBSAs), metropolitan divisions, and combined statistical areas (CSAs)" (July 2023), the following cities/counties are in that area that include USDA zones):

"Camden County

Currituck County

Gates County

Gloucester County

Isle of Wight County

James City County

Mathews County

Surry County

York County

Per the same, Richmond MSA counties with some USDA eligible areas include:

Amelia County

Charles City County

Chesterfield County

Dinwiddie County

Goochland County

Hanover County

Henrico County

King and Queen County (see lower limits above)

King William County

New Kent County

Powhatan County

Prince George County

Sussex County

For those of especially low income who are also disabled, 1% interest 38-year loans are available via USDA direct loans that you won't be able to get from a traditional lender, but rather directly from the USDA. I've seen where even someone with an income less than $800/month via social security was able to purchase a home through this program.

Habitat for Humanity

Habitat for Humanity Williamsburg/Greater Peninsula offers a 0% interest equivalent mortgage with no money down. It's available to buyers in the cities/counties of:

Hampton

Newport News

Williamsburg / James City

Charles City / New Kent

York / Poquoson

Another similar program by Habitat is available for those in the following Southside locations:

Chesapeake,

Isle of Wight,

Norfolk,

Portsmouth,

Smithfield,

Suffolk,

Virginia Beach

According to the websites at the moment, heavily depending on household size & location, incomes need to be between $26200 (for 1 person on the Peninsula) to $98750 (for 8 people on the Peninsula or the South Side).

This program is meant for those who are in a bad housing environment or are homeless at the moment.

The peninsula program requires at least 300 hours of "sweat equity" and the Southside program requires at least 200 hours, but these hours may come from yourself as well as friends/family.

FHA Plus Loan w/ Price/Loan Limits & Income Limits

While state regulations vary, the FHA plus loan (Virginia version) is an option where you have a primary mortgage and then a second mortgage to cover your down payment, and in some cases, part of your closing costs. In Virginia, you'll need a 680 credit score to finance part of your closing costs. This program is limited by income. Here are some of the income/sales price limits as of the web version on 5/23/24:

FHA Plus Like Loan w/ Price/Loan Limits, No Income Limits, & 600 FICO

As published on BluePoint Mortgage:

"This loan is essentially a two-in-one package that starts off together. The first part is a standard 30-year FHA loan, which is backed by the government. The second part is a 10-year private loan that covers what would normally be the down payment. Together, they make up the full amount needed to purchase a home, with no initial down payment required from the buyer. Borrowers still need to consider closing cost and other housing expenses.

• 600 Min. FICO

• 96.5% LTV FHA 30 year Fixed 1st

• Combined with a 3.5% LTV 10 year Fixed 2nd

• No DTI overlay with DU approval

• No income limit

• No first-time homebuyer requirement

• Non-occupant co-borrowers allowed

• Conforming balance only

• 2-1 temporary buydown option available

• Product not available in NY, or WA

Eligible Properties:

• Single Family Residences

• 2 units – LLPA applies

• PUDs

• Townhouses

• Condominiums – Must not be in litigation, Must be FHA Approved

• Double wide manufactured housing OK"

• As shared in omre detail here, "Note Rate is 2.0% greater than rate. on 1st loan."

For this one, reach out to

Robert Parks nmls 1883793

Branch Manager / Senior Loan Officer 

at Acre Mortgage & Financial Inc. nmls 13988

c: 571.233.8589

rparks@acremortgage.com

https://robertparks.acremortgage.com 

70 East Main Street, Marlton, NJ 08053

VA vendee loans on VA foreclosures including for non-veterans

For certain VA foreclosures, there's a program to buy with as little as no money down even if you aren't a veteran as long as you plan to occupy the property. It's even available to non-owner occupants for as little as 5% down.

"The https://listings.vrmco.com site will show a program logo stating “This property qualifies for seller financing”. You can also set search parameters to only search Vendee™-eligible properties."

Eligible states include VA, MD, NC, & more.

https://www.benefits.va.gov/BENEFITS/factsheets/homeloans/vendee.pdf

https://vrmlending.com/faq/

https://info.vrmproperties.com/vendeefinancing/

https://www.vrmco.com/vendee-loans/

$100 down on HUD REOs

When I purchased my first home, it was a HUD home. There were hoops to jump through, it needed a lot of work, but I bought it in a period of time when typical investors weren't allowed to ratify offers on the home, called the "exclusive" period. While I purchased with a conventional renovation loan, another option for many HUD homes is a $100 down payment FHA loan, whether a traditional FHA style or FHA 203k rehab loan.

While I didn't see a government site that wasn't affiliated with a particular state regarding the subject, here's more information from a 3rd party.

While most HUD homes aren't eligible, the Good Neighbor Next Door program offers essentially 50% off homes, where eligible buyers (EMTs, teachers, firefighters, and law enforcement working in the same city/county where a GNND home is available) can get a fantastic deal and pair it with a $100 down FHA loan.

Program-specific down payment assistance & closing cost assistance

Down payment assistance & closing cost assistance can sometimes be added to another product, whether stacked onto something that already provides no closing costs or down payment like NACA or something that typically requires a down payment and closing costs. There are likely thousands of options of down payment assistance and closing cost assistance available throughout the US, and often dozens of option in a target area like SE VA. Some of these are available throughout the nation, others may be available throughout the state, others may be available in in certain cities/counties, others may be available in certain areas within cities/counties, and others are specific to particular homes. In some cases, a single program can provide more than enough funds for both a down payment and closing costs, providing instant equity as long as you follow the rules of the program.

Here is HUD's list of localized programs by state (i.e. VA), though keep in mind that it's only the tip of the iceberg of possibilities.

Many programs are either unique to 1 lender or a group of lenders. 1 example is the FHLBank Atlanta's Down Payment Assistance Programs. It has income caps, but if your area has a lower income than the median income of your state (which is the case in both Hampton Roads and in Greater Richmond), you'll be happy to know that the income qualifications (80% median household income per household size) are based on the greater of your state or your MSA. Here are those income limits for VA as of 2023 if your metropolitan statistical area has a lower income than the median income of your MSA:

AHP Income Limits	1 Person Household	2 Person Household	3 Person Household	AHP Income Limits	1 Person Household	2 Person Household	3 Person Household	4 Person Household	5 Person Household	6 Person Household	7 Person Household	8+ Person Household	4 Person Household	5 Person Household	6 Person Household	7 Person Household
80%	$61,600.00	$70,400.00	$79,200.00	80%	$61,600.00	$70,400.00	$79,200.00	$88,000.00	$95,050.00	$102,100.00	$109,100.00	$116,150.00	$88,000.00	$95,050.00	$102,100.00	$109,100.00

Wrapping closing costs/prepaids into the loan

Also, some closing costs are commonly wrapped into the mortgage, such as the VA funding fee (0-3.3%) & up front mortgage insurance (typically 1.75%) on FHA homes. In addition to that option, many other loans can wrap closing costs & prepaids into the loan by increasing the rate via the points system.

Seller paid closing cost assistance & even debt pay-down

Many are aware that the seller can provide closing cost assistance for the buyer at times, especially in a single offer scenario. While requesting closing cost assistance makes an offer significantly less competitive, I've seen at least one case where a property with multiple offers accepted my buyer's offer despite my buyer requesting over 1% closing cost assistance in part because of how strong of an offer we made in other terms.

Often there are lender imposed limits to how much a seller can provide and what that money can go towards based on underwriter guidelines. With most conventional mortgages of 3% down or 5% down, for instance, sellers won't be able to provide more than 3% closing cost assistance. There are exceptions, however, such as Garrett Mortgage which doesn't have a % cap on seller-paid closing cost assistance.

In the case of VA financing, the seller in some cases can even provide the buyer funds to pay off debts in addition to helping them with typical closing costs.

Get a recommendation

For a personalized report of eligible programs from Adam, go here.

If you are working with an agent already or already have one in mind (other than Adam Garrett), I would appreciate it if you used this public resource with instant results instead of the above form. That link isn't taking from a list that's nearly as comprehensive as my list, with a number of missing program options, & less accuracy due to fewer questions, but it does give you an immediate report & using it if you already have a Realtor would be quite considerate to me in terms of my limited time.

As much as I'd like to provide a personalized report for everyone, and can still provide you a report even if you are already working with an agent, it's not as easy for me to be directly compensated for my time if I do not refer you to an agent that you purchase with. Keep in mind that my research for your agent is coming from an agent themself, and as such, I can ask questions to Realtors that you wouldn't think to ask to weed out the bad ones and provide you with someone ideal. See my referral page here: https://www.adambgarrett.com/referrals

What's best for you in SE VA? Fill out Adam's form on the subject here.

Related:

1. Housing Choice Voucher Homeownership Program (via Section 8 Subsidies)

2. Low or No Credit Mortgages

3. Programs to Reduce Rent for Tenants

4. Zillow: Down Payment Assistance: Mortgage Help for First-Time Home Buyers and How to Apply

5. What do Buyers Need to Purchase a Home? 

6. Credit & Finances 

7. House Buyer Guide

8. Home Buying Programs per USA.gov

9. Homebuyer Resources per Virginia DHCD

10. What to Look for in a Buyer's Agent for Your Home or Other Real Estate

11. What Adam Offers Buyers 

12. Contact Adam