Best lenders for low- and no-down payment mortgages in 2024
Published on January 08, 2024
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3 min read
Images by Getty Images; Illustration by Hunter Newton/Bankrate
If you meet eligibility requirements, it’s possible to get a low- or no-down payment mortgage. Bankrate examined several mortgage lenders to uncover the best for these types of loans. Here is our guide to the best low- and no-down payment mortgage lenders in 2024.
Best low- and no-down payment mortgage lenders
| Lender | Credit requirements | Down payment minimum | Bankrate Score |
|---|---|---|---|
| PenFed Credit Union | 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.7 |
| Veterans United Home Loans | 620 for conventional and VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.9 |
| U.S. Bank | 620 for conventional loans, 740 for jumbo loans | 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.8 |
| Old National Bank | 620 for conventional loans, 640 for FHA loans, 680 for VA loans | Undisclosed | 4.6 |
| Wells Fargo | 620 for conventional loans | 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans | 4.8 |
| Better | 620 for conventional loans, 580 for FHA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.6 |
| Mr. Cooper | 620 for conventional loans, 580 for FHA loans, 600 for VA loans | 3% for conventional loans, 3.5% for FHA loans, none for VA loans | 4.6 |
| Rocket Mortgage | 620 for conventional loans, 680 for jumbo loans, 580 for FHA and VA loans | 3% for conventional loans, 10%-15% for jumbo loans, 3.5 for FHA loans, none for VA loans | 4.6 |
PenFed Credit Union
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA
- Credit requirements: 650 for conventional loans, 700 for jumbo loans, 620 for FHA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Branch locations and online
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Pros
- No lender fees
- Offers lender credits up to $2,500
Cons
- Higher minimum credit score requirements
- No USDA loans
Veterans United Home Loans
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional and VA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Branch locations and online
U.S. Bank
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 740 for jumbo loans
- Down payment minimum: 5% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Branch locations and online
Old National Bank
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans, 640 for FHA loans, 680 for VA loans
- Down payment minimum: Undisclosed
- Where to find: Branch locations and online
Wells Fargo
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA, USDA
- Credit requirements: 620 for conventional loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA and USDA loans
- Where to find: Branch locations and online
Better
Learn more
in our Bankrate review
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- Availability: All U.S. states
- Loans offered: Conventional, FHA, VA
- Credit requirements: 620 for conventional loans, 580 for FHA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Online
Mr. Cooper
Learn more
in our Bankrate
-
- Availability: All U.S. states
- Loans offered: Conventional, FHA, VA
- Credit requirements: 620 for conventional loans, 580 for FHA loans, 600 for VA loans
- Down payment minimum: 3% for conventional loans, 3.5% for FHA loans, none for VA loans
- Where to find: Online
Rocket Mortgage
Learn more
in our Bankrate review
-
- Availability: All U.S. states
- Loans offered: Conventional, jumbo, FHA, VA
- Credit requirements: 620 for conventional loans, 680 for jumbo loans, 580 for FHA and VA loans
- Down payment minimum: 3% for conventional loans, 10%-15% for jumbo loans, 3.5% for FHA loans, none for VA loans
- Where to find: Online
Pros and cons of low- and no-down payment home loans
Pros
- Gets you out of renting and into homeownership sooner
- Makes buying a home feasible even for those with little savings or assets
- Allows you to reserve your savings (if applicable) for emergencies or financial goals
Cons
- Less money down means you’re borrowing more, which translates to higher monthly mortgage payments
- Limited equity upfront so you can’t use it in an emergency, and if the market turns, you could owe more than the home’s worth
- Low-down payment loans require mortgage insurance
- Low-down payment loans could come with higher interest rates
- No-down payment loans come with extra fees
- Some sellers consider less money down a negative, which can be a disadvantage in a hot market
Types of low-down payment mortgages
| Conventional 97 loans | HomeReady/Home Possible loans | HomeOne loans | FHA loans |
|---|---|---|---|
| 3% down | 3% down | 3% down | 3.5% down |
| 620 credit score | Flexible underwriting | Flexible underwriting | 580 credit score (500-579 score with 10% down) |
| Income limits | Income limits | No income limits | No income limits |
| First-time homebuyers | First-time and repeat homebuyers | First-time homebuyers | First-time and repeat homebuyers |
Types of no-down payment mortgages
| VA loans | USDA loans |
|---|---|
| No money down | No money down |
| Flexible underwriting | Flexible underwriting |
| No income limits | Income limits |
| Eligible service members, veterans and spouses | Borrowers in eligible locations |
FAQ about low- and no-down payment mortgages
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Of the mortgage types that require a down payment, the lowest possible amount is 3 percent of the home’s purchase price. This is the minimum requirement for a conventional loan.
Note: Some lenders advertise 1 percent-down mortgages. These are 3 percent conventional loans that only require the borrower to put down 1 percent; the lender pays the other 2 percent as a grant.
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You don’t have to be a first-time homebuyer to qualify for a low- or no-down payment mortgage. You’ll simply need to meet the lender’s requirements around credit score, debt-to-income (DTI) ratio and other factors.
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To determine the best lenders for low- and no-down payment mortgages, Bankrate periodically evaluates more than 80 lenders for factors relating to affordability, availability and borrower experience, assigning each a Bankrate Score out of five stars. The best lenders for low- and no-down payment mortgages generally have a Bankrate Score of 4 stars or higher. Learn more about our methodology.
Erik J. Martin is a Chicago area-based freelance writer/editor whose articles have been featured in AARP The Magazine, Reader's Digest, The Costco Connection, The Motley Fool and other publications. He often writes on topics related to real estate, business, technology, health care, insurance and entertainment.
Jeff Ostrowski covers mortgages and the housing market. Before joining Bankrate in 2020, he spent more than 20 years writing about real estate, business, the economy and politics.
