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What Is 100% Mortgage Financing?

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100 percent mortgage financing allows buyers to finance the entirety of their home’s purchase price. This means a down payment isn’t a barrier to homeownership.

No-down payment loans aren’t just for first-time home buyers. Repeat buyers can use them, too. Down payment assistance programs also help buyers cover the money they need to buy a house.

Read on to learn more about 100 percent mortgage financing and how you can secure a no-down payment loan with Homebuyer.com.

Which Loans Are 100 Percent Mortgage Financing Home Loans?

USDA and VA loans don’t require a down payment, so you can purchase a home with 100 percent mortgage financing. Each of these loan types have specific requirements for qualification.

USDA Loans

You can qualify for a USDA mortgage if:

  • You have a credit score of 620 or higher
  • You’re purchasing a home in an eligible location
  • You’ll live in the home you’re purchasing

Check your mortgage eligibility.

VA Loans

VA loans are available for service members and their spouses if:

Check your mortgage eligibility.

Buyers who don’t qualify for zero-down payment loans can still finance their home purchase with down payment assistance.

Illustration: Multiple 0% down mortgage programs and what it takes for a first-time home buyer to qualify

Down Payment Assistance For Low-Down Payment Mortgages

Down payment assistance programs provide grants and no- or low-interest loans to cover your down payment, closing costs, and other home-buying expenses. This means you can buy a house with no money.

Renters prove they can afford housing payments when they pay rent, but saving for a down payment prevents many renters from buying a home. Down payment assistance removes this barrier and allows people to purchase a home, lock in their monthly payment, and eliminate future rent increases.

Tip: If you rent a home, you can likely afford regular mortgage payments, but a large down payment may be a barrier to homeownership. Down payment assistance clears that barrier for access to the largest wealth-building tool in the country: homeownership.

Homebuyer.com offers down payment assistance to first-time home buyers with an FHA mortgage.

The Down Payment Assistance You Didn't Know About [Is This Better Than a Grant?!]

Buyers can choose between a 3.5 percent second loan to cover the down payment, or a 5 percent second loan that can cover the down payment and closing costs.

Down payment assistance programs typically have credit history and income requirements. Programs for first-time home buyers may also require the completion of a home buyer education course.

Closing Costs For a No Down Payment Loan

Buyers are responsible for closing costs, like origination fees, prepaid expenses, and mortgage insurance which average 1-2 percent of the home’s purchase price. There are opportunities to have some of these expenses covered by the seller or your lender.

You can do 100% financing with the help of a second mortgage and Homebuyer.com

Some down payment assistance funds can apply to closing costs, too. There are several ways you can buy a house without spending thousands upfront.

What is 100 Percent Mortgage Financing At Homebuyer.com?

Homebuyer.com can help first-time buyers purchase their home with no down payment with multiple 100 percent mortgage financing choices.

Home buyers must meet three criteria to qualify:

  • Your credit score must be 580 or higher
  • You may not buy more than your local loan limit
  • You must live in the home you’re purchasing

These loans are available for 30-year fixed-rate mortgages. 100 percent financing isn’t available for refinancing, vacation homes, or investment properties.

If you’re ready to buy a home with $0 down or have other questions about mortgage financing, chat with us to learn more.

FAQ about 100 Percent Mortgage Financing

Still have questions about 100 percent mortgage financing? Here are answers to the most common questions from buyers:

Do banks provide 100 percent mortgage financing?

Many lenders, banks included, will grant 100 percent financing for applicable mortgages. Each lender has their own requirements, but you’ll typically need a credit score of 580 or higher to qualify for 100 percent mortgages, like VA and USDA mortgages.

Consult with your lender to learn what mortgage types you qualify for, and what down payment assistance programs are available.

Is 100 percent financing a good idea?

100 percent mortgage financing is smart when you want to keep as much cash in the bank as possible. It can be risky to deplete your entire savings to cover a down payment.

A good rule of thumb is to have six months’ worth of income saved in case of illness, job loss, or other emergencies.

The trade-off of buying a home without a down payment is that your loan amount will be larger. Make sure you’re comfortable with your mortgage payments.

Graphic: A chart showing how a home's mortgage payment changes with the size of your down payment

Sources: NAR | FRED

What credit score do you need to qualify for down payment assistance?

Every program has different requirements, and they’re similar to mortgage loan requirements. You’ll typically need a credit score of at least 580-620 to qualify.

How do I apply for down payment assistance?

You can apply for down payment assistance through your mortgage lender. Apply for down payment assistance through Homebuyer.com in just three minutes.

Do you have to repay down payment assistance loans?

Repayment options depend on your lender and down payment assistance program. In many cases, down payment assistance loans are forgivable.

Homebuyer’s Down Payment Assistance Loan is a forgivable second mortgage. If you qualify and continue to make timely payments on your first mortgage, you won’t have to repay a penny.

Will using down payment assistance hurt the chances of my offer being accepted?

As long as you have a mortgage pre-approval, down payment assistance shouldn’t affect your offer. A typical seller wants to know you’re pre-approved for a loan and can purchase the home, not with how much down payment you make.

Saving for a down payment is a common hurdle to homeownership, but many buyers don’t need one at all. With 100 percent mortgage financing, renters can purchase a home with nothing down.

Get pre-approved for a mortgage today.

Dan Green
Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He's appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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