VA, USDA, FHA + DPA, Navy Federal, Credit Union Programs
100% Financing Home Loans: Every Zero-Down Program Available in 2026
Two federal programs offer true 100% financing with no down payment: VA loans for eligible veterans and USDA loans for rural and suburban buyers who meet income limits. A third path — combining an FHA loan with down payment assistance — achieves effective zero-down homeownership for buyers who qualify for both. Each program has different eligibility requirements, credit minimums, and cost structures.
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VA Loans (0% Down)
- Eligibility: Active-duty service members, veterans, National Guard, Reserve, and eligible surviving spouses
- Credit: No VA-set minimum; lender overlays typically 580-640; no monthly mortgage insurance at any LTV
- Cost: One-time funding fee of 2.15% first use (waived for service-connected disability); no PMI ever
- Action: If you have VA eligibility, this is the best zero-down option available — lowest total cost of any program
USDA Loans (0% Down)
- Eligibility: Property must be in a USDA-eligible rural or suburban area; household income cannot exceed 115% of area median
- Credit: 640 minimum for GUS automated approval; manual underwriting available below 640 with compensating factors
- Cost: 1% upfront guarantee fee + 0.35% annual guarantee fee; both lower than FHA’s comparable charges
- Action: Check USDA’s eligibility map — many suburban areas within 30 minutes of major cities qualify
FHA + Down Payment Assistance
- How it works: FHA requires 3.5% down, but a DPA grant or forgivable loan covers the 3.5% — resulting in zero cash from the buyer
- Credit: 580 minimum for FHA; DPA programs may have additional credit requirements
- Income limits: Most DPA programs cap household income at 80%-120% of area median income
- Action: Ask your lender which DPA programs they participate in — not all lenders offer all programs
Cost Comparison
- VA total monthly cost: Lowest — no monthly MI; funding fee is one-time and can be rolled into the loan
- USDA total monthly cost: Low — 0.35% annual guarantee fee is less than half of FHA’s 0.55% MIP
- FHA + DPA total cost: Highest — 0.55% annual MIP is permanent and DPA second mortgages may carry a small interest charge
- Action: Compare all three if you qualify for multiple programs — the lowest rate does not always mean the lowest total monthly payment
Frequently Asked Questions
Can you really buy a house with no money down?
What credit score do I need for a zero-down loan?
Do I still pay closing costs with 100% financing?
The Bottom Line Up Front
True 100% financing exists through VA loans (for veterans) and USDA loans (for rural/suburban buyers). FHA loan program combined with down payment assistance achieves effective zero-down for qualifying buyers in most markets. You do not need 20% down — or any down payment at all — to buy a home in 2026.
The choice between these programs comes down to eligibility and total cost. VA is the cheapest zero-down option because it has no monthly mortgage insurance. USDA is the second cheapest with a 0.35% annual guarantee fee. FHA + DPA is the most widely available path but carries the highest ongoing cost due to permanent MIP. Some credit unions and lender-specific programs also offer 100% financing for qualifying borrowers, though these are less common and often come with higher rates or geographic restrictions.
How Do VA Loans Offer 100% Financing?
VA loans are backed by the Department of Veterans Affairs, which guarantees a portion of the loan to the lender. This guarantee eliminates the need for a down payment and monthly mortgage insurance, making VA the lowest-cost zero-down mortgage available.
The VA charges a one-time funding fee instead of monthly MI. For first-time VA borrowers with zero down, the funding fee is 2.15% of the loan amount. On a $400,000 home, that is $8,600 — which can be rolled into the loan balance and financed over 30 years. Veterans with a service-connected disability rating of 10% or higher are exempt from the funding fee entirely, making VA financing essentially free for disabled veterans.
- Eligibility: active-duty service members with 90+ days of service, veterans with an honorable discharge, National Guard and Reserve with 6+ years of service, and eligible surviving spouses
- Certificate of Eligibility (COE): required to verify eligibility; your lender can usually obtain it electronically through the VA’s system within minutes
- No loan limit for full-entitlement veterans: if you have never used your VA benefit or have fully restored entitlement, there is no VA loan limit — the limit only applies to veterans with reduced entitlement
- Property requirements: must be a primary residence; VA minimum property requirements must be met at appraisal; investment properties and vacation homes are not eligible
- Funding fee tiers: 2.15% first use with 0% down; 1.5% first use with 5%+ down; 3.3% subsequent use with 0% down; waived for disabled veterans
Deal Saver
A veteran with a pending disability rating can close the VA loan with the funding fee included, then receive a refund after the disability rating is confirmed. If your disability claim is in process, do not wait for the decision to buy — close now, and the VA will refund the funding fee once your rating is finalized at 10% or higher.
How Does USDA 100% Financing Work?
USDA guaranteed loans are designed for moderate-income buyers in rural and suburban areas. The program offers 100% financing with no down payment required, and the mortgage insurance costs are lower than FHA.
Eligibility has two requirements: the property must be in a USDA-eligible area (checked through the USDA’s online eligibility map), and the household income cannot exceed 115% of the area median income for the county and household size. Many borrowers are surprised to find that properties within 20-30 minutes of major metro areas qualify — the definition of “rural” is broader than most people expect. GUS (Guaranteed Underwriting System) is USDA’s automated underwriting system, and it requires a 640 minimum credit score for automated approval. Below 640, manual underwriting is available through some USDA-approved lenders, but the file needs strong compensating factors including residual income, low DTI, and stable employment. The USDA guarantee fee structure is the most affordable of any government mortgage program — the 1% upfront fee and 0.35% annual fee are both lower than FHA’s equivalent charges, making USDA the second-cheapest zero-down option after VA.
- Geographic eligibility: check the USDA eligibility map at the USDA Rural Development website — many suburban areas qualify that buyers would not consider “rural”
- Income limits: based on total household income (not just the borrower’s income); limits vary by county and household size; typically $103,500-$136,600 for a 1-4 person household in 2026
- Guarantee fees: 1% upfront guarantee fee (rolled into the loan) + 0.35% annual guarantee fee — both significantly lower than FHA’s 1.75% UFMIP + 0.55% annual MIP
- Credit: 640 minimum for GUS automated approval; manual underwriting is available below 640 but with stricter DTI limits and compensating factor requirements
- Property types: single-family homes, condos (with USDA project approval), and manufactured homes (with permanent foundation) — no multi-unit or investment properties
How Does FHA Combined with Down Payment Assistance Achieve Zero Down?
FHA requires 3.5% minimum down payment with a 580+ credit score. But if a down payment assistance program covers that 3.5%, the buyer’s out-of-pocket cash for the down payment is zero. This combination makes FHA + DPA the most widely available zero-down path for non-veteran, non-rural buyers.
DPA programs come in several forms: outright grants (no repayment), forgivable second mortgages (forgiven after 5-10 years of occupancy), and deferred second mortgages (repaid when you sell or refinance). The FHA loan covers the primary mortgage at 96.5% LTV, and the DPA covers the remaining 3.5%. Some DPA programs also cover closing costs, bringing the buyer’s total out-of-pocket to nearly zero. The cost tradeoff is FHA’s permanent mortgage insurance — 1.75% upfront MIP plus approximately 0.55% annual MIP for the life of the loan on most post-2013 originations.
Lender Reality Check
Not every FHA lender participates in every DPA program. State housing finance agency programs are the most common, but lender-specific programs from institutions like Chenoa Fund, GSFA, and local housing authorities also exist. If your preferred lender does not offer DPA, ask which lenders in your area do — switching to a DPA-participating lender can save you $10,000-$20,000 in out-of-pocket costs at closing.
How Do the Zero-Down Programs Compare on Total Cost?
The program you choose affects your total monthly payment significantly, even though all three achieve zero down. The difference is in the ongoing mortgage insurance or guarantee fee costs that each program charges.
On a $350,000 home at 6.5% interest, the monthly principal and interest payment is roughly the same across all three programs. But VA charges no monthly insurance, USDA charges 0.35% annually ($102 per month), and FHA charges approximately 0.55% annually ($160 per month). Over 10 years, the FHA borrower pays $19,200 more in insurance than the VA borrower and $6,960 more than the USDA borrower — all on the same house at the same rate with the same down payment of zero.
| Program | Down Payment | Upfront Fee | Monthly MI/Fee | 10-Year MI Cost |
|---|---|---|---|---|
| VA | $0 | $7,525 (2.15%) | $0 | $0 |
| USDA | $0 | $3,500 (1%) | ~$102 (0.35%) | $12,240 |
| FHA + DPA | $0 (DPA covers 3.5%) | $5,906 (1.75%) | ~$155 (0.55%) | $18,600 |
The Bottom Line
You do not need 20% down to buy a home. VA and USDA offer true zero-down financing. FHA combined with down payment assistance achieves effective zero-down for qualifying buyers in most markets. The right program depends on your eligibility, location, and total cost tolerance.
VA is the best option for eligible veterans — zero down, no monthly MI, and the lowest total cost. USDA is the best option for buyers in eligible areas who meet income limits — zero down with lower annual fees than FHA. FHA + DPA is the most widely available path for everyone else, but the permanent MIP makes it the most expensive over time. Compare all available programs you qualify for, and factor in both the monthly payment and the 5-10 year total cost before choosing. The lowest down payment is not always the lowest overall cost.
Frequently Asked Questions
Is 100% financing more expensive than putting money down?
Yes, in total cost. Financing the entire purchase price means a larger loan balance, which means more interest over the life of the loan. VA borrowers pay a higher funding fee with 0% down than with 5%+ down. USDA and FHA + DPA borrowers finance the full purchase price plus upfront fees. But for buyers who cannot save a down payment, 100% financing lets you start building equity and stop paying rent immediately — which often outweighs the additional long-term interest cost on the higher balance.
Can I combine 100% financing with seller concessions for closing costs?
Yes. VA allows the seller to pay up to 4% of the purchase price in concessions. FHA allows up to 6% in seller concessions. USDA allows up to 6% as well. Seller concessions can cover all or most closing costs, meaning the buyer may need very little cash out of pocket beyond any required reserves. In a buyer’s market with motivated sellers, negotiating seller-paid closing costs is common.
What if I do not qualify for VA or USDA?
FHA + DPA is your primary zero-down path. Some credit unions also offer 100% financing programs for members. Conventional loans with 3% down through HomeReady or Home Possible are not zero-down but require minimal cash. If DPA covers the 3% conventional minimum, you can achieve near-zero out-of-pocket even on a conventional loan — though this is less common than FHA + DPA combinations.
Do zero-down loans have higher interest rates?
Not necessarily. VA loan rates are typically at or below conventional rates because the VA guarantee reduces lender risk. USDA rates are also competitive. FHA rates are generally competitive with conventional at lower credit scores. The rate you receive depends more on your credit score, lender, and market conditions than on the down payment amount. The cost difference from zero down shows up primarily in mortgage insurance, not the interest rate itself.
Can I use 100% financing for a second home or investment property?
No. All zero-down federal programs (VA, USDA, FHA) require the property to be your primary residence. Investment properties and vacation homes require a minimum down payment — typically 15%-25% for conventional investment property loans. There are no zero-down options for non-owner-occupied properties.