BEST OF

10 Best Lenders for Low- and No-Down-Payment Mortgages in 2021

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

NerdWalletAug 13, 2021

Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

If you're like many home buyers, a down payment is the biggest obstacle 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 to 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%.

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.

The coronavirus pandemic introduced some new challenges to getting a mortgage. Many lenders facing high loan demand and staffing issues increased their fees, adjusted minimum required credit scores or temporarily suspended certain loan products. While some products and business practices have returned to pre-pandemic levels, you might still find delays and limited options. If you can’t pay your current home loan, refer to our mortgage assistance resource. For information on how to cope with financial stress during this pandemic, see NerdWallet’s financial guide to COVID-19.

Summary of Best Lenders for Low- and No-Down-Payment Mortgages in 2021

Quicken Loans
Learn more

at Quicken Loans

Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
Quicken Loans

Min. Credit Score

620

Min. Down Payment

3%
Learn more

at Quicken Loans


Why we like it

Good for: borrowers looking for just about all of the services your neighborhood lender offers — with online convenience.

Pros

  • Quicken Loans couples a fully online application with available mortgage advisors for those who want a human touch.

  • Instantly verifies employment and income for many working Americans.

  • Offers custom fixed-rate loan terms that are between eight and 30 years.

  • Provides a wide variety of loan types, including renovation loans and all government-backed mortgage products.

Cons

  • Quicken Loans doesn't offer home equity loans or HELOCs.

  • Quicken's lender fees can be stout and it doesn't offset those fees with particularly low mortgage rates.

Read Full Review
New American Funding
Learn more

at New American Funding

New American Funding: NMLS#6606

4.5

NerdWallet rating 
New American Funding

Min. Credit Score

620

Min. Down Payment

3%
Learn more

at New American Funding


Why we like it

Good for: borrowers who need to be evaluated on the basis of nontraditional credit and those interested in various down payment assistance programs.

Pros

  • Uses manual underwriting to evaluate creditworthiness, in some cases.

  • Offers full online mortgage application, rate quotes, document upload and loan tracking.

Cons

  • Mortgage rates offered to borrowers are higher than the government-reported median of all lenders.

Read Full Review
Rocket Mortgage by Quicken Loans
Learn more

at Rocket Mortgage by Quicken Loans

Rocket Mortgage by Quicken Loans: NMLS#3030

4.5

NerdWallet rating 
Rocket Mortgage by Quicken Loans

Min. Credit Score

620

Min. Down Payment

3%
Learn more

at Rocket Mortgage by Quicken Loans


Why we like it

Good for: borrowers who appreciate smartphone and online convenience for a fully digital home loan experience powered by Quicken Loans.

Pros

  • Caters to self-service users who want to apply for a home loan online and talk to a human only as necessary.

  • Estimates the loan amount you’ll qualify for within minutes.

  • Offers document and asset retrieval capabilities.

Cons

  • If you’re a “look me in the eye” type of customer, you’re out of luck.

  • Getting a customized interest rate requires a credit check, which can lower your credit score by a few points.

Read Full Review
SoFi
Learn more

at SoFi

SoFi: NMLS#1484615

3.5

NerdWallet rating 
SoFi

Min. Credit Score

620

Min. Down Payment

5%
Learn more

at SoFi


Why we like it

Good for: borrowers seeking an entirely digital application process for conventional purchase mortgages or refinancing.

Pros

  • Provides an entirely digital mortgage application.

  • May consider vested restricted stock units as income.

  • SoFi members may qualify for a $500 discount on mortgage fees.

Cons

  • Does not offer government-backed loans, such as FHA or VA.

  • Requires users to create an account to see customized mortgage rates.

  • SoFi mortgages are unavailable in five states.

Read Full Review

Alliant: NMLS#197185

4.5

NerdWallet rating 
Alliant

National / Regional

National

Min. Down Payment

3%

Why we like it

Good for: first-time home buyers who want to avoid mortgage insurance and prefer a digital application process.

Pros

  • Low- or no-down-payment options with no mortgage insurance.

  • Mortgages are available for non-warrantable condominiums.

Cons

  • Does not offer government-backed mortgages, like FHA and VA loans.

  • Does not offer renovation mortgages.

Read Full Review

Flagstar: NMLS#417490

5.0

NerdWallet rating 
Flagstar

Min. Credit Score

620

Min. Down Payment

3%

Why we like it

Good for: borrowers who want a wide range of choices — not only among mortgage products, but also in the channel they prefer, whether a branch, online or on the phone.

Pros

  • Offers a wide range of loan types and products, including FHA, VA and USDA.

  • Has a full suite of online conveniences.

  • Does well with rate transparency, and monthly payment estimates add mortgage insurance, when applicable.

Cons

  • Home equity lending is geographically limited.

Read Full Review

PNC: NMLS#446303

4.5

NerdWallet rating 
PNC

Min. Credit Score

620

Min. Down Payment

3%

Why we like it

Good for: borrowers with low-to-moderate incomes or limited down payments. PNC offers several low-down-payment loans, including one with no mortgage insurance.

Pros

  • Posts current mortgage rates on its website.

  • Has an online application for mortgage preapproval and a digital tool to track application progress.

  • Offers several affordable loan options, including FHA, VA, USDA and the PNC Community Loan.

Cons

  • Can't complete a full mortgage application online.

  • Doesn't offer renovation mortgages.

  • In-person service is not available in every state.

Read Full Review

SunTrust (Truist): NMLS#2915

5.0

NerdWallet rating 
SunTrust (Truist)

Min. Credit Score

620

Min. Down Payment

3%

Why we like it

Good for: first-time home buyers, doctors and other borrowers interested in low-down-payment mortgage options.

Pros

  • Offers a wide variety of loan options, including special programs for doctors, entrepreneurs and other professionals.

  • Offers a complete suite of online mortgage application tools and loan tracking.

  • Sample rates and fees are easy to find on the website.

Cons

  • Customized rates aren't available online without starting an application.

  • Branches are limited mostly to the Southeast.

Read Full Review

Citibank: NMLS#412915

5.0

NerdWallet rating 
Citibank

National / Regional

National

Min. Down Payment

3%

Why we like it

Good for: borrowers wanting to compare mortgage rates online for a variety of loan options.

Pros

  • Offers a wide variety of loan options, including low-down-payment mortgages and jumbo mortgages.

  • Provides customizable mortgage rates on its website.

  • Offers low rates and fees compared with other lenders.

Cons

  • Charges a mortgage application fee.

  • Requires help from a mortgage loan officer to complete the loan application online.

Read Full Review

Navy Federal: NMLS#399807

4.5

NerdWallet rating 
Navy Federal

National / Regional

National

Min. Down Payment

0%

Why we like it

Good for: military members and their families looking for low-down-payment mortgages.

Pros

  • Offers a wide range of affordable mortgage products designed for military members.

  • Has an online application for preapproval.

  • Offers low rates compared with most lenders.

Cons

  • Website does not provide customized mortgage rates based on credit score or other factors before you apply.

  • Credit union membership is limited to veterans and current military members, their families, and certain federal employees, retirees and contractors.

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 sooner.

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

Conventional loans with down payments under 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. Lenders often require a 620 FICO score and can set other qualifications for VA loans, so it’s always a good idea to shop with more than one lender.

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 13, 2021

Methodology

NerdWallet's star ratings for mortgage lenders are awarded based on our evaluation of the products and services each lender offers to consumers who are actively shopping for the best mortgage. The five key areas we evaluated include the variety of loan types and products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available Home Mortgage Disclosure Act data. To ensure consistency, our ratings are reviewed by multiple people on the NerdWallet Mortgages team.

To recap our selections...

NerdWallet's Best Lenders for Low- and No-Down-Payment Mortgages in 2021

Frequently asked questions