4 Options for a No Money Down Mortgage

4 Options for a No Money Down Mortgage

Atlantic Home Mortgage
Atlantic Home Mortgage
Published on May 21, 2020
three people looking at options for no money down mortgage

4 Options for a No Money Down Mortgage

In uncertain times, cash is king. Maybe your landlord is selling his property and the new owner doesn’t want to rent. Maybe your lease is up. Maybe you need to move to care for a loved one or pursue a better job opportunity. Regardless of why you’re looking to buy a house, you want to carefully consider the money you’ll save over the life of your mortgage and the peace of mind you’ll have if you make a smaller down payment. What are possible alternatives for a no money down mortgage? Today, we discuss four options for a Zero Down mortgage program.


A VA loan may be the most popular Zero Down mortgage program on the market. This type of mortgage is backed by the U.S. Department of Veterans Affairs. To qualify, you must be purchasing a primary home and you must be a current or former military member. Some surviving spouses, reservists and National Guardsman may also qualify.

The most important thing to understand about the VA loan is that the loan program does not require a minimum credit score. However, your lender might. If you’re thinking about house shopping in the near future, we recommend having a credit score of at least 640 for the best shot at being approved.


A USDA loan, like a VA loan, is a government-guaranteed loan. USDA loans are backed by the U.S. Department of Agriculture. These loans exist to allow lower-income earners to purchase, build or improve a primary residence in qualified rural areas. Depending on the area you’re looking to move into, the maximum population can reach up to 35,000.

Unlike VA loans, borrowers seeking a USDA loan should have a credit score of at least 640. Most other requirements to qualify for this loan are pretty standard. Your income should be stable and dependable. You must be a U.S. citizen or prove you have permanent residency. You must have no collections and at least a year of no late payments on your credit report. However, it is of utmost importance to note that the AGI of your household must be no greater than 115% of the median income of the area you’re purchasing a home in.


The Doctor Loan Program is a very special type of  Zero Down mortgage program. Also known as the Physician Loan Program, this mortgage program is designed for certain physicians, dentists and medical students who are just establishing themselves in their careers. They are drowning in student loan debt and have little-to-no cash saved up.

You can find a list of banks in your state that participate in this program here. Every lender will have its own income, DTI ratio, mortgage insurance and credit score requirements. To have the best chance of qualifying, you should have a credit score of at least 700. Unless you live in an area that allows for jumbo loans, like the Eastern seaboard, California or Hawaii, you may be capped at a borrowing limit of $500,000.


Many people believe that they must come up with a 3.5% down payment to qualify for an FHA loan. However, this isn’t necessarily true. Often, there is a limit to how much of your down payment can come in the form of a gift. With an FHA loan, your entire down payment may come in the form of a gift and you only need a credit score of 500 to qualify.


Do you think the right financial move is to pursue a mortgage with no money down? If so, you’re not alone. If you’d like to learn more about this increasingly common financing option, please contact us today at Atlantic Home Mortgage. We’re here to help you navigate uncharted waters.

Atlantic Home Mortgage
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