10 Best Lenders for Low- and No-Down-Payment Mortgages of 2023
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.
Best Lenders for Low- and No-Down-Payment Mortgages
Min. credit score
Min. down payment
Guaranteed Rate: NMLS#2611
Best for digital convenience
New American Funding: NMLS#6606
Best for overall lending experience
Best for FHA loans
Best for flexible mortgage programs
Best for first-time home buyers
- Displays detailed sample rates for many of its loan products.
- Offers a wide variety of loans, including jumbo and interest-only products.
- Offers low rates compared with other lenders, according to the latest federal data.
- Doesn't offer home equity loans.
- Offers a wide variety of purchase and refinance mortgages with an emphasis on helping underserved communities.
- Its home equity line of credit can be used for an owner-occupied or second home.
- Offers a program to enable buyers to make cash offers.
- Mortgage origination fees tend to be on the high end, according to the latest federal data.
- Offers multiple low-down-payment loan programs.
- May consider alternative credit data, such as bank statements.
- You can view customized rates for purchasing a home and apply online.
- Doesn't offer home equity lines of credit.
- Lender fees are on the high side, according to the latest federal data.
- Offers a wide range of loan types and products, including FHA, VA and USDA.
- Borrowers can apply and track loan status online.
- Offers customized online rate quotes with monthly payment estimates, including mortgage insurance, when applicable.
- Home equity loans are geographically limited.
- Origination fees are on the high side compared with other lenders, according to the latest federal data.
- A full slate of loan offerings.
- Offers a no-down-payment loan with a shorter repayment term that helps accelerate home equity accumulation.
- Digital conveniences include a mobile app.
- You’ll need to provide contact information or speak to a loan officer for customized mortgage rates.
- Origination fees are on the high side, according to the latest data.
- Offers a complete suite of online mortgage application tools and loan tracking.
- Sample rates are easy to find on the website.
- Offers a wide variety of loan options, including construction loans and programs for doctors.
- Customized rates aren't available online without starting an application.
- For borrowers who prefer to apply in person, branches are limited mostly to the South and East.
- Offers a full line of conventional and government loan products.
- Provides home equity loans and lines of credit.
- Allows borrowers to apply and track their loan's progress online.
- No personalized mortgage rates available online.
- Published mortgage rates assume an above-average credit score.
- Offers a wide variety of loan types and products.
- Has robust online capabilities, and an app for iOS and Android.
- Mortgage interest rates are lower than typical, according to the latest data.
- Has a limited number of physical mortgage offices.
- No rate information is available without starting an application or speaking with a loan officer.
- Does not offer home equity loans or lines of credit.
- Offers conventional, FHA, VA, USDA and jumbo loans.
- Multiple customer service options, including brick-and-mortar branches, online message center and phone.
- Low average mortgage interest rates and origination fees, according to the latest federal data.
- No mortgage rates displayed online.
- Does not offer home equity loans or lines of credit.
- Has branches across the country for customers who prefer face-to-face service.
- Receives high marks for customer satisfaction, according to J.D. Power and Zillow.
- Mortgage interest rates tend to be on the lower end, according to the latest federal data.
- Mortgage rates aren't available online; you'll need to contact a loan officer.
- Doesn't offer home equity loans or lines of credit.
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 June 1, 2023
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 more than 50 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (measured among lenders with 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 home purchase loan volume, according to the latest HMDA data or FHA and VA loans must each make up at least 1% of the lender's home purchase loan 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 2021 HMDA data for origination volume, origination fee, average interest rate and share-of-product data.
NerdWallet's Best Lenders for Low- and No-Down-Payment Mortgages of 2023
- Guaranteed Rate: Best for digital convenience
- New American Funding: Best for overall lending experience
- Carrington: Best for FHA loans
- Flagstar: Best for flexible mortgage programs
- Northpointe: Best for first-time home buyers
- Truist: Best for variety of loan types
- US Bank: Best for variety of loan types
- BNC National Bank: Best for VA loans
- Freedom Mortgage: Best for low rates and fees
- loanDepot: Best for renovation loans
Frequently asked questions
- What is the lowest down payment for a mortgage?
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.
- Are there income limits on no-down-payment mortgages?
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.
- Which loan programs do not require a down payment or private mortgage insurance?
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.
- Do I have to be a first-time home buyer for a low- or no-down-payment mortgage?
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.