People generally make a down payment to secure a loan or mortgage for buying a home. It’s an upfront amount, usually a specific percentage of the total house cost. While this payment is an integral part of the home loan closing process, it can leave homebuyers with limited reserves for other purposes. The good news is that a few low- and no-down-payment home loans are available. We’ve listed these options below.

VA loans
These loans are for eligible military members, veterans, and surviving spouses. They’re guaranteed by the government’s Department of Veteran Affairs (VA). If you meet the eligibility criteria, you can get a mortgage with no money down. The department doesn’t directly issue the amount but backs private lenders who offer them. VA loans are also called non-conforming loans because of their lenient eligibility criteria. The features include relatively easier credit ratings, lower interest rates, a simple borrowing process, and limited closing costs.

USDA loans
Backed by the United States Department of Agriculture (USDA), these no-down-payment home loans are best if you’re looking to purchase a house in rural or suburban areas. You can learn if the property will qualify by checking the map of the eligible regions on the USDA website. But remember that your total household income shouldn’t be more than the county’s median income to qualify. A sought-after benefit of this loan is low mortgage insurance. However, you may have to pay a guarantee fee and an annual fee that’s added to the monthly installment.

Navy Federal Loan
Navy Federal Credit Union, the largest country’s largest credit union, also offers no-down-payment home loans known as the Homebuyers Choice Loan. However, they’re available to qualified members only, such as military personnel, defense employees, and direct family members. They have fixed interest rates, don’t require private mortgage insurance, and come with several other benefits. The Navy Federal Credit Union also offers attractive financing options for parents and students, and you can visit their website for details.

FHA loans
Federal Housing Administration (FHA) loans are insured by the federal government, so they have a down payment as low as 3.5 percent. And since they’re insured, banks and lenders even give the amount to buyers without a great credit score. These low-down-payment home loans are ideal for people with low to moderate incomes. Compared to VA, USDA, and Navy Federal Credit Union, FHA schemes have more generic eligibility criteria. However, they’re available for residential homes only. Since you have to live in the house for which you’re borrowing the money, it’s less attractive for investment purposes.

DPA program
If you fail to get a mortgage with no money down from the above sources, consider the down payment assistance (DPA) program. Almost all states, counties, and communities in the country offer some assistance for buying a house through this localized program. The typical features include low down payment, assistance with arranging the money, flexible borrowing and repayment conditions, help with closing the loan, lower interest rates, and, sometimes, all of these. But you must meet specific criteria to be eligible. For instance, some schemes are restricted to first-time homebuyers.

Other lenders
Government-backed options are considered the safest for no or low-down-payment home loans. But a few private lenders also offer credit with a nominal upfront payment, provided you meet the eligibility criteria. Although their availability has reduced significantly in the last decade, some financial institutions and private lenders still offer home loans with a down payment as low as three percent. The two most sought-after choices are Fannie Mae and Freddie Mac:

Fannie Mae
Fannie Mae is one of the biggest mortgage giants in the country. Their HomeReady plan offers up to 97 percent loan-to-value (LTV) to homebuyers from lower-income groups, which means you have to pay just three percent. The mortgage plan is available for both first-time buyers and others.

Freddie Mac
Home Possible is a popular house mortgage product of Freddie Mac for very low to low-income borrowers. It comes with a nominal down payment and a maximum of 97 percent LTV. The other benefits include suitable income limits, capped credit fees, and flexible sources of financing. The plan is available for first-time buyers, move-up borrowers, and retirees.

No-down-payment home loans are attractive because they ensure you have more money in hand and you can also buy the house sooner. However, before taking any loan, compare multiple lenders. After finding a suitable option, talk to them directly about the conditions, criteria, and features. It’s also essential to have a stable income and a plan to repay the amount within the set time. Failure to do so could put a lot of pressure on personal finances and push one into the debt trap.