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.
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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.
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
| Lender | NerdWallet rating | Min. credit score | Min. down payment | Learn more |
|---|---|---|---|---|
 New American Funding: NMLS#6606 Learn more at New American Funding | Best for overall lending experience | 620 | 3% | Learn more at New American Funding |
 Northpointe: NMLS#447490 Learn more at Northpointe | Best for first-time home buyers | 620 | 3% | Learn more at Northpointe |
 Flagstar: NMLS#417490 | Best for flexible mortgage programs | 620 | 3% | Read review |
 Carrington: NMLS#2600 | Best for FHA loans | 620 | 5% | Read review |
 Caliber: NMLS#15622 | Best for VA loans | 620 | 3% | Read review |
 Homebridge: NMLS#6521 | Best for VA loans | 620 | 3% | Read review |
 Guild Mortgage: NMLS#3274 | Best for FHA loans | 620 | 3% | Read review |
at New American Funding
New American Funding: NMLS#6606
Min. credit score
620Min. down payment
3%at New American Funding
at Northpointe
Northpointe: NMLS#447490
Min. credit score
620Min. down payment
3%at Northpointe
Flagstar: NMLS#417490
Min. credit score
620Min. down payment
3%Carrington: NMLS#2600
Min. credit score
620Min. down payment
5%Caliber: NMLS#15622
Min. credit score
620Min. down payment
3%Homebridge: NMLS#6521
Min. credit score
620Min. down payment
3%Guild Mortgage: NMLS#3274
Min. credit score
620Min. down payment
3%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
- New American Funding: Best for overall lending experience
- Northpointe: Best for first-time home buyers
- Flagstar: Best for flexible mortgage programs
- Carrington: Best for FHA loans
- Caliber: Best for VA loans
- Homebridge: Best for VA loans
- Guild Mortgage: Best for FHA loans
Frequently asked questions
You may be able to get a conventional loan with a down payment as low as 3%. An FHA loan, which is insured by the Federal Housing Administration, requires a minimum down payment of 3.5%. Some loans — such as VA and USDA loans — can be secured with no money down.
Sometimes, but not always. Some mortgages have income limitations depending on where the property is located, like USDA loans, which are guaranteed by the United States Department of Agriculture. VA loans, backed by the Department of Veterans Affairs, have no income restrictions.
VA and USDA loans may allow you to purchase a home with no down payment or mortgage insurance. Both of these loans have fees that cover the cost of foreclosure in the event you default on the mortgage loan, however.
No, low-down-payment mortgages aren't limited to first-time home buyers. FHA loans are popular with first-time home buyers because of the minimum 3.5% down payment requirement and relaxed credit score requirements. With some 3% down conventional loans, such as HomeReady and Home Possible, a homeowner education course is required if all borrowers are first-time home buyers.
