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7 Best Lenders for Low- and No-Down-Payment Mortgages of 2022

Compare lenders that offer low- and no-down-payment mortgages, and learn about their pros and cons.

Aug 1, 2022

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If you're like many home buyers, a down payment is one of the biggest obstacles between you and homeownership. Finding a lender with low- or no-down-payment mortgages could be the difference between buying a home now or having to wait months or years.

VA loans, backed by the Department of Veterans Affairs, and USDA loans, guaranteed by the U.S. Department of Agriculture, require no down payment for qualified buyers.

FHA loans, insured by the Federal Housing Administration, require down payments as low as 3.5%. And even today's conventional loans allow down payments as low as 3%.

Some lenders have their own proprietary programs that are competitive with government loans in terms of both down payment requirements and application criteria.

Putting less money down could mean buying a home sooner. But lower down payments have disadvantages, too, such as higher monthly mortgage payments, so it's important to understand and compare options before buying a home.

Best Lenders for Low- and No-Down-Payment Mortgages

New American Funding
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at New American Funding

New American Funding: NMLS#6606

5.0

NerdWallet rating 
New American Funding

Min. credit score

620

Min. down payment

3%
Learn more

at New American Funding


Why we like it

Government loans account for more than a quarter of New American Funding's loan originations, according to the latest federal data.

Pros

  • Offers a proprietary loan program.

  • FHA loans make up 16% of New American Funding's loan originations.

  • VA loans make up 12% of New American Funding's loan originations.

Cons

  • Mortgage origination fees tend to be on the high end, according to the latest federal data.

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Northpointe
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at Northpointe

Northpointe: NMLS#447490

4.5

NerdWallet rating 
Northpointe

Min. credit score

620

Min. down payment

3%
Learn more

at Northpointe


Why we like it

Northpointe offers two proprietary mortgages with $0 down, which is rare for proprietary loan programs.

Pros

  • Offers two proprietary loan programs.

Cons

  • Government-backed loans make up only 17% of Northpointe's originations, according to the latest federal data.

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Flagstar: NMLS#417490

5.0

NerdWallet rating 
Flagstar

Min. credit score

620

Min. down payment

3%

Why we like it

Flagstar's Destination Home mortgage requires no down payment, which is rare for proprietary loan programs.

Pros

  • Offers a proprietary 0% down mortgage loan.

Cons

  • Operates only in California, Indiana, Michigan, Ohio and Wisconsin.

  • USDA loans make up less than 1% of Flagstar's loan originations, according to the latest federal data.

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Carrington: NMLS#2600

4.5

NerdWallet rating 
Carrington

Min. credit score

620

Min. down payment

5%

Why we like it

Government-backed loans make up more than two-thirds of Carrington's loan originations, according to the latest federal data.

Pros

  • FHA loans make up more than one-third of Carrington's loan originations.

  • VA loans make up nearly one-third of Carrington's loan originations.

Cons

  • USDA loans make up less than 1% of Carrington's loan originations.

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Caliber: NMLS#15622

4.0

NerdWallet rating 
Caliber

Min. credit score

620

Min. down payment

3%

Why we like it

Government-backed loans make up more than a quarter of Caliber's loan originations, according to the latest federal data.

Pros

  • VA loans make up 15% of Caliber's loan originations.

  • FHA loans make up 14% of Caliber's loan originations.

  • They offer a proprietary loan catered to borrowers with low credit scores and high debt-to-income ratios.

Cons

  • They only have 6 branch locations.

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Homebridge: NMLS#6521

4.0

NerdWallet rating 
Homebridge

Min. credit score

620

Min. down payment

3%

Why we like it

Government-backed loans make up nearly a quarter of Homebridge's loan originations, according to the latest federal data.

Pros

  • VA loans make up 12% of Homebridge's loan originations.

  • FHA loans make up 11% of Homebridge's loan originations.

Cons

  • Doesn't post interest rates on its site.

Read Full Review

Guild Mortgage: NMLS#3274

4.0

NerdWallet rating 
Guild Mortgage

Min. credit score

620

Min. down payment

3%

Why we like it

Government-backed loans make up nearly one-third of Guild's loan originations, according to the latest federal data.

Pros

  • FHA loans make up 15% of Guild's loan originations.

  • VA loans make up 11% of Guild's loan originations.

Cons

  • Does not offer home equity loan products.

  • Origination fees tend to be on the higher end, according to the latest data.

Read Full Review

Pros and cons of low- and no-down-payment home loans

The pros: You don't have to wait until you have saved enough money for a large down payment. That means you can become a homeowner and start building equity more quickly.

The cons: Low- and no-down-payment mortgages include extra expenses.

Conventional loans with down payments of less than 20%, along with FHA and USDA loans, require buyers to pay for mortgage insurance, which protects the lender in case the borrower defaults. VA loans have a one-time VA funding fee.

A low- or zero-down-payment mortgage means you will start your homeownership journey with little to no equity in the home. If your home declines in value, you can end up owing more than the property is worth. Your interest rate and monthly mortgage payment could also be higher with a low-down-payment mortgage.

Credit score requirements for low- or no-down-payment mortgages

FHA loans: To qualify for a 3.5% payment on an FHA loan, you’ll need at least a 580 credit score. With a score between 500 and 579, you’ll need a 10% down payment.

Conventional loans: On low-down-payment conventional loans, a 620 score or better is generally required. Some conventional loans, such as HomeReady and Home Possible, are geared to low-income borrowers.

VA loans: VA loans cater to borrowers with military connections. The required credit score for VA loans varies by lender, but many ask borrowers to have at least a 620 or have other qualifications.

USDA loans: USDA loans are for buyers in rural and some suburban areas. Applicants with credit scores of 640 and higher can qualify for streamlined processing. Those with lower scores have to go through a more rigorous underwriting process. Applicants with no credit score or limited credit histories can qualify for USDA loans with nontraditional credit information, such as rental and utility payments.

More from NerdWallet

Last updated on August 1, 2022

Methodology

The star ratings on this page reflect each lender's overall star ratings. Read more about how we determine those ratings.

The lenders on this page are chosen using this methodology:

NerdWallet reviewed nearly 60 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (lenders had to have at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country.

For inclusion in this roundup, lenders must have an overall score of 4 or higher. FHA, USDA and VA loans must each make up at least 1% of the lender's loan volume, according to the latest HMDA data or FHA and VA loans must each make up at least 1% of the lender's volume and the lender must offer a proprietary mortgage program with a minimum down payment of 3% or less or for borrowers with less than a 580 credit score.

NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also utilized 2020 HMDA data for origination volume, origination fee, rate spread and share-of-product data.

To recap our selections...

NerdWallet's Best Lenders for Low- and No-Down-Payment Mortgages of 2022

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