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10 Best Lenders for Low- and No-Down-Payment Mortgages in 2020

NerdWalletJanuary 2, 2020

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Learn about the pros and cons of low- and no-down-payment mortgages, and compare lenders that offer them.

NOTE: Due to the coronavirus outbreak, obtaining a mortgage may be a bit of a challenge. Lenders are dealing with demand and staffing issues. If you can’t pay your current home loan, refer to our mortgage assistance resource. For the latest information on how to cope with financial stress during this emergency, see NerdWallet’s financial guide to COVID-19.

If you're like many home buyers, a down payment is the biggest obstacle between you and homeownership. Finding a lender with zero- or low-down-payment loans 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, backed 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.

Summary of Best Lenders for Low- and No-Down-Payment Mortgages in 2020

LenderNerdWallet Rating Minimum Credit Score Minimum Down PaymentLearn More

Rocket Mortgage: NMLS#3030

at Rocket Mortgage

Best for online experience

620

3%

at Rocket Mortgage

Quicken Loans: NMLS#3030

at Quicken Loans

Best for overall zero- and low-down-payment lender

620

3%

at Quicken Loans

Vylla: NMLS#2600

Best for low credit score or nontraditional credit history

620

3%

Read review

Flagstar: NMLS#417490

Best for overall zero- and low-down-payment lender

620

3%

Read review

Bank of America: NMLS#399802

Best for traditional lending experience

620

3%

Read review

PNC: NMLS#446303

Best for traditional lending experience

620

3%

Read review

SunTrust: NMLS#2915

Best for first-time home buyers

620

3%

Read review

Citibank: NMLS#412915

Best for first-time home buyers

N/A

3%

Read review

Navy Federal: NMLS#399807

Best for low credit score or nontraditional credit history

N/A

0%

Read review

SoFi: NMLS#1484615

Best for online experience

660

10%

Read review
Logo

at Rocket Mortgage

Rocket Mortgage: NMLS#3030

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Rocket Mortgage


Why we like it

Ideal for anyone who appreciates smartphone app service, support and time savings. Rocket Mortgage offers a fully digital home loan experience with a large variety of mortgage products.

Pros

  • The site caters to self-service users who want to apply for a home loan without talking to a human unless it’s absolutely necessary.

  • With your authorization, accesses asset statements from 98% of U.S. financial institutions.

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

  • Rocket Mortgage’s document and asset retrieval capabilities can save you a bunch of time and hassle.

Cons

  • Doesn't offer home equity loans or HELOCs.

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

  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.

Read Full Review
Logo

at Quicken Loans

Quicken Loans: NMLS#3030

Logo

Min. Credit Score

620

Min. Down Payment

3%

at Quicken Loans


Why we like it

Ideal choice for convenience and quick-response customer service. Quicken Loans provides just about all the services your neighborhood lender does — 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 more than 60% of working Americans.

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

  • Provides FHA-backed loans, USDA loans as well as products offered by Freddie Mac and Fannie Mae that require down payments as low as 3%.

Cons

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

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

  • Doesn’t consider alternative credit data. It just looks at credit scores and debt-to-income ratios, the way most mortgage lenders always have.

Read Full Review

Vylla: NMLS#2600

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for first-time home buyers or credit-challenged borrowers who may have trouble qualifying for a mortgage.

Pros

  • Low minimum credit score.

  • Online application, loan tracking and document upload.

  • Free rate locks.

Cons

  • No online preapproval.

  • No presence in Massachusetts or North Dakota.

Read Full Review

Flagstar: NMLS#417490

Logo

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

  • Doesn’t offer renovation loans at this time.

  • Home equity lending is geographically limited.

Read Full Review

Bank of America: NMLS#399802

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers who prefer a traditional bank. Bank of America offers a wide array of mortgages and online account management tools. It also has first-time home buyer loans with low down payments and no mandatory mortgage insurance.

Pros

  • Allows borrowers to apply entirely online.

  • Offers down payment and closing cost assistance programs.

  • May give existing customers a discount on mortgage lender origination fees.

Cons

  • Does not offer renovation loans.

Read Full Review

PNC: NMLS#446303

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers with low to moderate incomes or limited down payments. PNC offers a low-down-payment loan with no mortgage insurance.

Pros

  • Considers nontraditional credit history like rent payments.

  • Online tools help you estimate mortgage payments and track application progress.

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

Cons

  • It's not possible to complete the entire mortgage process online.

  • Offers mortgage loans nationwide, but has branches in only about two dozen states.

Read Full Review

SunTrust: NMLS#2915

Logo

Min. Credit Score

620

Min. Down Payment

3%


Why we like it

Ideal for borrowers with fair credit or better. SunTrust, now a part of Truist Financial Corp., offers a variety of customer service options.

Pros

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

  • Provides customer service in its physical locations, online, via chat and by phone.

  • Offers wide variety of loan options, including a loan program for licensed medical professionals

Cons

  • Customized rates not available on website without starting an application.

  • Branches limited to mostly the Southeast.

Read Full Review

Citibank: NMLS#412915

Logo

National / Regional

National

Min. Down Payment

3%


Why we like it

Ideal for first-time home buyers or those with weaker credit. Citibank, a large-scale mortgage lender with a full menu of home loan products, offers low down payment options and considers alternative credit data.

Pros

  • Low down payment options.

  • Discounts for Citibank customers.

  • Looks at alternative credit data like rent history and child support payments.

  • Available in all 50 states.

Cons

  • Charges a mortgage application fee.

  • Did not disclose origination fees, which may vary.

  • Can't complete loan online.

Read Full Review

Navy Federal: NMLS#399807

Logo

National / Regional

National

Min. Down Payment

0%


Why we like it

Ideal for military members and their families. Navy Federal Credit Union offers a wide range of mortgage products, an online application and considers alternative credit data for certain loan types.

Pros

  • Wide range of affordable mortgage products designed for military members.

  • Willing to look at nontraditional credit data, such as rent payments, as part of its credit evaluation for certain products.

  • Online application for preapproval with quick decision.

Cons

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

Read Full Review

SoFi: NMLS#1484615

Logo

Min. Credit Score

660

Min. Down Payment

10%


Why we like it

Ideal for young professionals and self-employed borrowers looking for a lender that considers nontraditional income.

Pros

  • Provides an entirely digital mortgage application to make the process easier for borrowers.

  • Considers nontraditional income, such as restricted stock units, and works with self-employed borrowers.

  • Does not require private mortgage insurance for jumbo loans.

Cons

  • Doesn't offer government-backed loans, like FHA or VA.

  • Does not offer home equity loans or HELOCs.

Read Full Review

Low- and no-down-payment mortgage FAQs

What are the 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-down-payment loans 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.

You might also pay a higher interest rate with a low-down-payment mortgage.

Do I have to be a first-time home buyer for a low- or no-down-payment mortgage?

Not always. For example, some low-down-payment loans assist buyers in economically disadvantaged areas. VA loans cater to borrowers with military connections, and USDA loans are for buyers in rural and suburban areas.

Some conventional loans, such as HomeReady and Home Possible, have income limits rather than first-time home buyer requirements — though the programs also have first-timer spinoffs.

What’s the credit score required for a low- or no-down-payment mortgage?

To qualify for the lowest 3.5% down 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.

On low-down-payment conventional loans, a 620 score or better is generally required.

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 more than one lender.

USDA loan 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.

Are there income limits on low-down-payment mortgages?

Sometimes but not always. First-time buyers are often excluded from income limitations. Same goes if you’re buying in a particular targeted area, or if you’re a military veteran.

Yet, just because you can put only a little down doesn’t always mean you should.

Can I get a low- or no-down-payment home loan with bad credit?

If you have the income and recent payment record that shows an ability and willingness to repay a loan, you can qualify — even with a checkered credit history.

But the setback that dinged your credit has to be in the past. If you’re still worrying about paying your bills on time, it’s best to wait on buying a house, no matter how tempting low down payments may be.

More from NerdWallet

Last updated on January 2, 2020

Methodology

NerdWallet's selection of mortgage lenders for inclusion here was made based on our evaluation of the products and services that lenders offer to consumers who are actively shopping for the best mortgage. The six key areas we evaluated include the loan types and loan products offered, online capabilities, online mortgage rate information, customer service and the number of complaints filed with the Consumer Financial Protection Bureau as a percentage of loans issued. We also awarded lenders up to one bonus star for a unique program or borrower focus that set them apart from other lenders. 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 2020

  • Rocket Mortgage: Best for online experience
  • Quicken Loans: Best for overall zero- and low-down-payment lender
  • Vylla: Best for low credit score or nontraditional credit history
  • Flagstar: Best for overall zero- and low-down-payment lender
  • Bank of America: Best for traditional lending experience
  • PNC: Best for traditional lending experience
  • SunTrust: Best for first-time home buyers
  • Citibank: Best for first-time home buyers
  • Navy Federal: Best for low credit score or nontraditional credit history
  • SoFi: Best for online experience