For many buyers, saving for a down payment is the biggest obstacle to homeownership. With home prices still high, coming up with tens of thousands of dollars upfront can feel impossible, especially for first-time buyers.

The good news? Buying a home with little or even no money down is possible if you know which loan programs and assistance options to explore. Let’s break down how it works, who qualifies, and what to consider before moving forward.

Can You Really Buy a Home With No Money Down?

Yes, but only under certain circumstances.

Most mortgage loans require a down payment to reduce risk for the lender. However, a few government-backed loan programs allow qualified buyers to purchase a home with 0% down, and several others offer very low down payment options.

Even with no down payment, keep in mind:

  • You’ll still need funds for closing costs
  • You must meet specific eligibility requirements
  • Not every home or location will qualify

Loan Programs That Require No Down Payment

VA Loans (0% Down)

VA loans are available to:

  • Active-duty service members
  • Veterans
  • Eligible surviving spouses

Why VA loans are popular

  • No down payment required
  • Competitive interest rates
  • No monthly mortgage insurance

Things to consider

  • Most borrowers pay a one-time VA funding fee
  • Lenders often require a credit score around 620
  • Property must be a primary residence

For eligible buyers in Albuquerque, VA loans can be one of the most powerful paths to homeownership.

USDA Loans (0% Down)

USDA loans are designed for low- to moderate-income buyers purchasing homes in eligible rural or suburban areas.

USDA loan highlights

  • No down payment required
  • Flexible credit guidelines
  • Lower mortgage insurance costs than FHA loans

Limitations

  • The home must be in a USDA-eligible area
  • Income limits apply
  • Primary residence only

Some areas outside Albuquerque city limits may qualify, making this an option worth exploring.

Low Down Payment Mortgage Options

If you don’t qualify for a VA or USDA loan, you still have excellent low-down-payment alternatives.

Conventional Loans (3%–5% Down)

Certain conventional loans allow buyers to put as little as 3% down, especially first-time buyers.

  • Requires stronger credit
  • Private mortgage insurance (PMI) is required if under 20% down
  • Often competitive interest rates for qualified buyers

FHA Loans (3.5% Down)

FHA loans are popular with first-time buyers and those rebuilding credit.

Benefits

  • Down payments as low as 3.5%
  • More forgiving credit requirements
  • Flexible income guidelines

Trade-offs

  • Mortgage insurance is required for the life of the loan
  • Loan limits apply

HomeReady® and Home Possible® Loans (3% Down)

These income-based conventional loans are designed for low- to moderate-income buyers.

  • 3% down payment
  • Homebuyer education required
  • Potential credits toward closing costs
  • Income must be under 80% of the area median income

How Down Payment Assistance Programs Help

Even if a loan requires a down payment, down payment assistance (DPA) programs can significantly reduce the upfront amount.

These programs may offer:

  • Grants (that don’t need to be repaid)
  • Forgivable loans
  • Deferred-payment loans

DPA programs are often run by:

  • State or local housing authorities
  • City programs
  • Nonprofit organizations

Availability varies by location, income, and buyer status (such as first-time buyers).

Other Ways to Reduce Upfront Costs

Gift Funds

Many loan programs allow buyers to use gifted money from:

  • Family members
  • Relatives
  • Sometimes close friends

Lenders will require a gift letter confirming the funds don’t need to be repaid.

Seller Concessions

In some situations, sellers may agree to:

  • Pay part (or all) of your closing costs
  • Help reduce your out-of-pocket expenses

This is more common in balanced or buyer-friendly markets.

No-Closing-Cost Loans

Some lenders offer loans where:

  • Closing costs are rolled into the loan, or
  • A higher interest rate offsets upfront costs

This can reduce cash needed at closing but increases long-term cost.

Pros and Cons of Buying With No Money Down

Pros

  • Faster path to homeownership
  • Minimal upfront savings required
  • Preserves cash for emergencies or moving costs
  • Makes homeownership possible for more buyers

Cons

  • Higher monthly mortgage payments
  • Little or no equity at the start
  • Greater risk if home values decline
  • Still requires cash for closing costs

Is Buying With No Money Down Right for You?

A low- or no-down-payment strategy may make sense if:

  • You have steady income but limited savings
  • You plan to stay in the home long-term
  • You qualify for a specialized loan or assistance program
  • You’re comfortable with a higher monthly payment

It may not be ideal if:

  • Your income is unstable
  • You don’t have emergency savings
  • You plan to move within a few years

The Bottom Line

Buying a home with no money down is possible—but it’s not one-size-fits-all. While VA and USDA loans offer true zero-down options, many buyers find success with low-down-payment loans combined with assistance programs, seller concessions, or gifted funds.

The key is understanding which programs you qualify for and how they fit your long-term goals.

Thinking About Buying a Home in Albuquerque?

As The New Home Guy ABQ, I help buyers:

Reach out today, and let’s see how close you really are to owning your next home.