How to Land a 0% Down Mortgage

Saving for a down payment is one of the biggest obstacles between first-time home buyers and home ownership. Luckily, there are now ways to get a 0% down payment. Thanks to options from FHA and more than 2000 state and local down payment programs accessible through Down Payment Resource, first-time buyers put down only 4 percent last year compared to 14 percent of repeat buyers.[1] FHA loans, as well as many local down payment programs, are available to buyers regardless of income.  However, it is also possible to get a mortgage without putting anything down if you have the right credentials. Here are three programs that can still snag you a 0% down mortgage.

VA Loans

The Veterans Administration guarantees purchase mortgages with no required down payment for qualified veterans, active-duty service members and certain members of the National Guard and Reserves. Private lenders originate VA loans, which the VA guarantees. There is no mortgage insurance. The borrower pays a funding fee, which can be rolled into the loan amount. For first-time purchasers making no down payment, the funding fee is 2.15% for members or veterans of the regulator military and 2.4% for those who qualify through service in the Reserves or National Guard.

Navy Federal Credit Union

Navy Federal Credit Union, the nation's largest credit union in assets and membership, offers 100% percent financing to qualified members who buy primary homes. Navy Federal eligibility is restricted to members of the military, some civilian employees of the military and U.S. Department of Defense, and family members. The credit union's zero-down program is similar to the VA's. One difference is cost: Navy Federal's funding fee of 1.75% is less than the VA's funding fees.

US Department of Agriculture

You don't have to be a farmer to qualify for the USDA’s Rural Development mortgage guarantee program. You just have to live in a rural or semi-rural area and qualify as a low-to-moderate income homebuyer in your community. USDA home loans have a maximum purchase price and may also cover home repairs and improvements. Another key benefit is that USDA mortgage rates are often lower than rates for comparable, low- or no-down-payment mortgages. Financing a home via the USDA can be the lowest cost means of homeownership.

Local and State Programs

Of course, there are plenty of low down payment options out there too. In addition to FHA, homebuyers, especially first time home buyers can qualify for low down payment loan programs sponsored by state or local housing authorities.  Contact Down Payment Resource to find programs where you live. [1] NAR Profile of Home Buyers and Sellers, 2016