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Lenders typically require a down payment of 20 percent of the home’s purchase price. There are special mortgage programs that allow you to purchase a home with no down payment for qualified veterans such as Veterans Administration (VA) mortgages or 100 percent financing mortgage programs. Mortgage terms vary from lender to lender but with no down payment or 100 percent financing mortgage programs you’ll generally pay higher interest rates and closing costs on these types of loans. Additionally, qualification requirements must also be met.

The Federal Housing Authority (FHA) loans offered in conjunction with mortgage lenders may have low or no down payments. However, most FHA loans require at least a 3.5% down payment of the appraised value of the home.

Besides special mortgage programs, you may be able to qualify for a conventional mortgage with no money down if you purchase private mortgage insurance (PMI). Typically, monthly PMI premiums are $45 to $65 per $100,000 borrowed. The cost of PMI depends on several factors, such as the amount of your down payment, your type of mortgage, and whether you pay premiums on a monthly basis or in a lump sum at closing. PMI premiums can significantly increase your monthly housing cost. Without PMI, however, you may be unable to qualify for a mortgage if you have no down payment.

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