Buying a house with no money down gets you on the path to home ownership much faster than saving up for a large down payment. After all, the average sales price of a home in the U.S. in early 2025 is $503,800; a traditional 20% down payment at that price point would top $100,000!
For the smoothest path to the closing table with a no-money-down loan, you may not need a lot of cash, but you do need a credit score of at least 600. Here’s everything you need to know about what credit score is needed to buy a house with no money down.
Key Points
• Zero-down VA and USDA loans enable home buying without a down payment for buyers who meet eligibility criteria.
• VA loans are designed for eligible veterans, military members, and surviving spouses, with many lenders preferring a credit score of 620 or higher, though some lenders allow 600.
• USDA loans support rural homeownership; lenders tend to require a minimum credit score of 640.
• Alternative financing methods, like down payment assistance and seller financing, can help reduce upfront costs.
• Comparing lenders and understanding loan terms is crucial to avoid hidden costs and find the best financial fit.
Can You Buy a House With No Money Down?
It’s possible to buy a house with no money down, but you’ll need to meet the eligibility requirements that come with certain types of mortgage loans or search for alternative programs that help keep your upfront costs to a minimum. You’ll also need to know what credit score is needed to buy a house with no money down, which can vary based on the type of loan and lender — more details on that below.
Note: SoFi does not offer a zero-down mortgage at this time.
What Is a Zero-Down Mortgage?
Typically, lenders require a down payment on a mortgage, whether you’re buying your first home, taking out a jumbo loan for a luxury property, or getting something in between. The down payment gives you automatic equity in the home, and lowers the lender’s risk since you have a financial investment in the home.
With a zero-down mortgage, also known as a no-down-payment mortgage, you take out a loan for the home’s full purchase price, instead of paying for part of it in cash. As the cost of living in the U.S. increases, this can help you buy a home faster than if you waited to save up a down payment.
How to Buy a House With No Money Down
There are a few different options to explore in order to buy a house with no money down.
Get a Zero-Down Home Loan
There are two primary types of zero-down home loans for first-time buyers, but you’ll need to meet mortgage preapproval requirements.
VA loans are backed by the federal government and designed specifically for veterans, military members, and surviving spouses. You don’t have to make a down payment and won’t have to pay private mortgage insurance. You do, however, need to meet the lender’s requirements for credit and income. Most lenders will be looking for a credit score of 620 for a VA loan, although some may allow a lower score. The higher the loan amount, the more strict a lender’s credit-score threshold may be.
USDA loans, also backed by the government, provide 100% financing for properties located in an eligible zone. The credit score needed for a USDA loan will vary based on the lender. A score of 640 or better is a baseline for many lenders, but even those with lower scores may qualify if they provide additional supporting documents for their application. (Note: SoFi does not offer USDA loans, although it does provide VA loans.)
This option isn’t solely for qualified first-time buyers, but USDA loans come with income limits that may be easier to meet if you’re earlier in your career and home-buying journey. Your income can’t exceed 115% of the area’s median household income. The maximum income level varies depending on family size, since the average monthly expense for one person is less than a family with multiple kids. You can search the USDA’s eligibility site to check eligible property addresses in your area.
Use a Down Payment Assistance Program
Some state and local governments, along with other entities like nonprofits, may offer down payment assistance programs. They’re more common in areas with a high cost of living, so not all of these programs will be available if you live in one of the best affordable places in the U.S.
Consider Alternative Strategies to Pay for a House With No Money
Though less conventional, it is possible to find alternative home financing options, such as seller financing or a lease-purchase agreement. You will need to enlist the help of a lawyer to pull together an agreement that protects you in these scenarios.
Seller financing involves creating a legal agreement directly with the seller, who serves as your lender. The seller typically needs to either fully own the house or just have a small mortgage balance left in order for this to get approved. Together you will negotiate the terms of the loan, including the length of the term and interest rate.
A lease-purchase agreement, also called rent-to-own or lease-to-own, will mean that you start off renting the property and will have the option to buy it after a certain period of time. You may need to pay a fee, and often a sales price is agreed on while you’re renting. A portion of your rent payment usually goes toward the purchase price, serving as a down payment.
Negotiating for closing credits might require you to make a down payment, but an agreement with the seller to cover some of your closing costs will reduce your overall spending. This can be challenging when the majority of the U.S. real estate market currently favors sellers, but the strategy may work with fixer-upper properties or if the inspection comes back with significant issues.
First-Time Homebuyer Loans With a Low Down Payment
Not all homebuyers will qualify for a home loan with no down payment. Here are some alternative options that require smaller down payment amounts.
Conventional mortgages Some mortgage lenders allow qualified first-time homebuyers of any income level to obtain a conventional home loan with just 3.5% down. Conventional loans typically require a credit score of at least 620.
Fannie Mae HomeReady and Freddie Mac Home Possible: Low-income first-time homebuyers may qualify for one of these home loans. The minimum down payment is just 3% and lenders may use your rent history to help supplement a lower credit score. Plus, with Fannie Mae, you could qualify for a $2,500 credit to reduce your loan balance.
FHA loans: These aren’t designed for first-time homebuyers, and you don’t need to worry about meeting income limits. With an FHA loan, you can qualify for a low 3.5% down payment if your credit score is 580 or higher.
How to Find the Best No-Down-Payment Mortgage Lenders
Compare multiple lenders early on in the home-buying process. Even if you qualify for a no-down-payment loan, lenders will vary in their interest rates and closing costs, all of which impact how much you pay upfront and over time.
If you’re trying to keep your cash spending as low as possible, look for lenders that offer closing cost credits for eligible borrowers. Usually they come with income limits and first-time homebuyer requirements. But if you qualify, that could mean extra cash in your pocket at closing — just be sure to check for hidden costs in the form of other fees or higher rates.
Pros and Cons of First-Time Homebuyer Loans With Zero Down
Is a zero-down home loan worth it? Weigh the pros and cons before you get started.
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Pros:
• You can buy a house faster.
• You’ll preserve any cash you have saved.
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Cons:
• You may qualify for a lower loan amount, restricting your home-buying budget.
• Monthly payments will be higher than if you had made a down payment.
• You may have to pay for some form of mortgage insurance.
• You’ll need to meet income limits or obtain a Certificate of Eligibility from the VA.
• It will take longer to build home equity.
Of course, if you don’t like some of the terms associated with your home loan, you can always apply for a mortgage refinance later on.
The Takeaway
Buying a house is expensive, and using a no-down-payment mortgage can help you become a homeowner faster. But you’ll need to meet a number of eligibility requirements, including credit score minimums, income thresholds, and more. And while there are alternative options available, it’s always crucial to compare lenders, rates, and fees to make sure you’re not taking on hidden costs. Ready to explore some options?
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
What credit score do you need to buy a house with no down payment?
It depends on the program and the lender. VA loans technically don’t have a minimum credit score requirement. Many lenders want to see a 620 or higher, though some may accept a score of 600. For USDA loans, the minimum score required by lenders is usually 640.
What credit score is needed to buy a $300K house?
The credit score needed to buy a $300,000 house depends on the type of mortgage. While VA and USDA loans have a minimum of 600 and 640, respectively, FHA loans allow for scores as low as 500 (with a 10% down payment) or 580 (with a 3.5% down payment).
What credit score do I need to buy a $250,000 house?
The credit score needed to buy a $250,000 house depends on the type of mortgage. The lowest credit score you could have and still secure a mortgage would be 500 (for an FHA loan with a 10% down payment). Expect to need a minimum credit score between 580 and 640 for other loans, depending on which kind you choose.
Can I get an FHA loan with no down payment?
You cannot get an FHA loan with no down payment. The least amount you could put down in this situation is 3.5%. You are allowed to obtain this money via a gift from a friend or relative, but you’ll need to follow specific guidelines if you go this route.
How can I get a 700 credit score in 30 days?
Whether you can get to a 700 credit score in a month depends on what is impacting your score — and how high (or low) a score you currently have. Some quick fixes include paying down high credit card balances, identifying and repairing errors in your credit report, and becoming an authorized user on someone else’s credit card — as long as it has a low balance and isn’t delinquent. But even if you already have a fairly good score, it might be hard to achieve a 700 in this brief window of time.
What builds credit the quickest?
In order to quickly build credit, you need to pay all of your bills on time. Late payment entries can quickly derail your score and stay on your credit report for seven years. You can also lower your credit utilization ratio by paying down credit card balances and asking for higher limits (just don’t charge them up).
Photo credit: iStock/Worawee Meepian
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
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¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency.
†Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency.
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