You can buy a house as a first time home buyer with no money down by applying for either a USDA or VA loan. Navy Federal Credit Union also has 100% financing available for first time home buyers, as long as you meet their requirements.

Home loans with no money down

Buying a home for the first time is no doubt a very exciting experience. It’s the little things like driving around the city or through your favorite neighborhood looking for houses with for sale signs. Visiting each house to see if it’s a great fit for your family was my favorite part.

However, before we can do the fun things, we must make sure that you have everything lined up and ready to go, things like financing and a pre-approved home loan amount should be taken care of before shopping around. With these companies listed below, you can get 100% financing with no money down if you are a first home buyer.

VA Loans

Serving time in the military has it’s perks, and one of them is getting 100% financing with no down payment if you’re a military vet. Another great reason for getting a VA loan is that you will not have mortgage insurance, which a lot of lenders tend to require. In order to start the process, you must first make sure that you are eligible.

Luckily the VA office has a page on their website that you can use to determine your eligibility. Once your eligibility has been determined, there’s a Certificate of Eligibility that you must present to a VA Loans lender that lets them know you are eligible for a government backed VA Loan. This certificate can be acquired one of the following ways:

Once you’ve applied and have found an approved VA loan lender using Zillow’s VA lender lookup page, you should have everything you need in order to start looking for your first home. Obviously this is all based on whether you have good credit or not. In order to get a VA loan, you must have a minimum credit score of 620. However smaller lenders can be a little flexible and let you get away with a lower credit score. If you haven’t checked your credit report in a while, check out our article on where to get your credit report free and how to decipher each section.

USDA Loans

In order to help out the development of rural areas, the United States Department of Agriculture created the rural area development program. With this program, first time home buyers have been receiving 100% financing for housing in rural areas. One thing to note is that with a USDA loan, unlike with a VA loan, you will need to pay for Private Mortgage Insurance(PMI), however this amount is lower than what you would normally pay with a traditional loan(0.35% vs 0.85%).

Once you are ready to start applying, we highly recommend that you first find an area that you are interested moving into because the USDA loan requirement states that the house must be located in an eligible rural area. With either a house or area in town picked out, head over to the property eligibility page on the USDA’s website. Enter the address of the house you are interested in buying. The system should tell you whether or not this house is eligible for the USDA loan.

After you have a home picked out in an eligible rural area, the next step is to verify that your income qualifies for this loan. Although each state has a different requirement, the USDA has a page where you can check if you meet the income requirements by entering your monthly income amount. Once you’ve determined your eligibility, make sure that you have a minimum credit score of 640. If you don’t know where to get your credit score for free, check out our guide on getting your annual report and understanding it. Once you’re sure you meet the requirements, it’s time to look for a USDA approved lender by finding one on their approved lenders PDF list.

Navy Federal Credit Union

Navy Federal Credit Union has a 100% financing loan similar to that of a VA loan, known as the 100% Financing HomeBuyers Choice Mortgage. One major difference is that family members of a military veteran can also benefit from these loans. The same applies to civilian military contractors. This type of loan does not require a PMI and comes with a 0% down payment. The rates are fixed for the length of the loan. The maximum amount you can borrow is $453,000, however they have a Jumbo plan which bumps it up to $1 Million.

Before you consider applying for a mortgage with them, we recommend going through their mortgage application checklist on their website and making sure that you have everything you need, ready to go. Some of the things you must have ready are your two year work history, two year address history, gross monthly income, and information about the house you are wanting to buy. This information ranges from the purchase price, to the loan amount, and estimated homeowners/condo association fees.

Begin your process of applying for a 100% financing HomeBuyers Choice loan by filling out the application on their page.

Other government backed mortgage loans

Let’s say that you don’t meet any of the requirements for either a VA loan or a USDA loan. There’s other government backed loans that you can apply for. Although these are not zero down payment loans, they do have a lower down payment percentage than traditional loans.

FHA Loans

Loans from the Federal Housing Administration are great for first time home buyers who do not meet the criteria for either a VA or USDA loan. As long as this will be considered your primary home, and you have a minimum of a 500 credit score, you can apply for an FHA loan. There’s a few things to keep in mind when applying for an FHA loan. If you have a credit score lower than 580, your required down payment will be 10% of the total loan amount. Otherwise with a 580 credit score or higher, you are only required to give a 3.5% down payment.

If you’re ready to start applying for an FHA loan, it’s best to find an FHA lender in your area. Search for approved FHA lenders on the FHA website.

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