Many potential homebuyers assume that making a down payment is a non-negotiable part of buying a home. The reality is that making a down payment of some kind is indeed required for most types of loans—but not all.

In fact, there are several ways to buy a home with little or no money down. That doesn’t necessarily mean you won’t have to pay certain fees or costs, but it can mean you won’t have to drain your savings to achieve homeownership. Here’s how.

A Major Challenge

When housing prices and interest rates are rising, homeownership can feel like a distant dream to many buyers. This is particularly true for young adults who are dealing with student loan debt and may have little money saved for a down payment.

Of course, there are mortgages available that require less than 20% down. Conforming loans, mortgages with terms and conditions that meet the criteria of Fannie Mae and Freddie Mac, for example, and loans guaranteed by the Federal Housing Administration (FHA) have relatively low down payments. For conforming loans, you’ll need at least 3% down, and for FHA loans, you’ll need at least 3.5%.

While these percentages seem more manageable, a 3% down payment on a $300,000 home still means coming up with $9,000 for a down payment, and for some that may feel out of reach. Plus, borrowers should also factor in the possibility of having to purchase mortgage insurance and other costs associated with purchasing a home such as closing costsescrow, and moving expenses.

But you’re in luck, there are other mortgage options available that may work better for your needs!

No-Down Options

There are several avenues that potential homeowners can take that require no down payment at all. For instance, active military servicemembers, veterans, and their families can use their VA benefits to buy a home with zero money down. Loans guaranteed by the U.S. Department of Agriculture enable buyers in rural and certain suburban areas to buy a home without a down payment as well.

Of course, if you don’t have VA benefits and aren’t looking to buy in a USDA-qualified area, you’ll need other down payment alternatives. Thankfully, some loan options, like the FHA’s first-time homebuyer program, allow you to use money gifted by a relative to cover some or all of your down payment. Also, many local and state governments as well as other resources provide down payment assistance programs, typically in the form of grants or second loans.

But if you don’t fit neatly into any of these categories, there may still be a solution that works for you.

How We Can Help

At Right By You Mortgage, we understand how difficult it is to save for a down payment. That’s why we created our 100% Home Loan program, which is designed specifically to bridge the gap between your homeownership goals and financial constraints.

Our 100% Home Loan is an adjustable-rate mortgage program that enables you to finance up to 100% of your home purchase, with little or no down payment needed. It comes with 5/5, 7/1 or 10/1 options (for more information about ARMs, click here) and there’s no requirement to buy mortgage insurance.

Our program is available in rural and urban areas—plus, if you’re a teacher or a first responder, you may qualify for additional financial incentives. And if you’re a Fidelity Bank customer, we offer a special rate discount.

The bottom line? If you want to buy a home and are worried about a down payment, there are plenty of alternatives that can still make your dream a reality.

If you’d like more information about buying a home with little or no down payment, our local loan experts at Right By You Mortgage are happy to help. Find a loan officer near you or email us at to get started.