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Zero Down Mortgage Loans

Zero down payment loan programs will allow you to buy your first home without putting any money down.

Two well known programs are the Home Owner 103% and the 107% programs. The 103% program allows you to finance up to 103% of the appraised contract price and the 107% allows financing for up to 107% of the appraised contract value of the home.

The amount you receive that’s greater than the value of the home, you can use for closing costs. This will allow you to get into your home without having to put down any money of your own.

Zero Down Mortgage Loan Requirements and Advantages

Using 100% financing includes a first mortgage or a combination of a first and second mortgage. Requirements for these loans include:

  • The property must be owner occupied
  • Your FICO score has to be very high (greater than 700)
  • Your debt to income ratio (DTI) must be 45% or less

The advantages of this type of loan are:

  • None of your own cash is required for a down payment
  • You don’t need to liquidate your other investments or stocks
  • You will be able to get the highest possible tax deduction

Zero Down Mortgage Loan Disadvantages

  • You may be considered to be more likely to lose your home
  • You will have higher monthly payments
  • You’ll get a smaller home because the amount loaned will be less than if you put money down
  • Zero down loans can be hard to find
  • It’s harder to qualify for a no money down loan
  • You’ll have to pay more for private mortgage insurance (PMI)

The Veterans Administration (VA) offers no down payment loans to qualifying veterans.

Steve Wyrostek Expert A 20 year plus veteran of the insurance industry, Steve managed departments in the personal and commercial lines areas of major insurers. He’s familiar with how insurance—ranging from boat to workers compensation—works.

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