A house is made of bricks and beams. A home is made of hopes and dreams.”
Which Mortgage Type Gives The Lowest Down Payment?: For most aspiring homeowners, the down payment remains one of the largest upfront costs and often, the biggest obstacle to buying a home. While many believe you need 20% down, this is a misconception. Several mortgage types offer low or even zero down payment options, especially in 2025’s flexible lending environment.
Let’s compare FHA, VA, and Conventional loans the three most common mortgage types and determine which one can help you get the keys to your new home with the least cash upfront.
FHA Loans: A Popular Low Down Payment Option
FHA loans, backed by the Federal Housing Administration, are designed to help first-time and lower-income buyers.
- Minimum Down Payment: As low as 3.5% with a credit score of 580 or higher
- Who It’s For: Buyers with limited savings or lower credit scores
- Mortgage Insurance: Required upfront and annually, increasing the long-term cost
According to Experian, FHA loans remain one of the most accessible ways to buy a home with minimal upfront cost, helping millions secure homes with down payments under $10,000.
VA Loans: Zero Down For Eligible Veterans
VA loans, backed by the Department of Veterans Affairs, are hands-down the lowest down payment option—often requiring no money down at all.
- Minimum Down Payment: 0%
- Who It’s For: Active-duty military, veterans, and eligible surviving spouses
- Mortgage Insurance: None, but a one-time VA funding fee may apply
Per CNBC Select, VA loans consistently offer some of the best rates and lowest barriers to homeownership for those who qualify. In 2024, over 1 million VA-backed home loans were issued in the U.S., reflecting their strong demand and accessibility.
Conventional Loans: Flexible But Credit-Dependent
Conventional loans are not backed by the government and are best for borrowers with good credit and financial history.
- Minimum Down Payment: 3% for qualified first-time homebuyers (via programs like HomeReady or Home Possible)
- Who It’s For: Buyers with solid credit, stable income, and savings
- Mortgage Insurance: Required if down payment is below 20%, but can be removed once equity reaches 20%
As PenFed Credit Union notes, while conventional loans offer lower down payment options, they are more stringent with approval criteria.
Final Verdict: Which Has The Lowest Down Payment?
✅ VA loans require 0% down, making them the top choice for eligible borrowers.
✅ Conventional loans with 3% down are a close second—ideal for financially stable buyers.
✅ FHA loans, though slightly higher at 3.5%, are more lenient with credit history and still very accessible.
Frequently Asked Questions (FAQ)
What Is The Lowest Possible Down Payment For A Mortgage?
The lowest is 0% down via a VA loan, available to qualifying military members and veterans.
Can First-Time Buyers Get A Mortgage With 3% Down?
Yes. Certain conventional loan programs like HomeReady and Home Possible allow 3% down for first-time buyers.
Do FHA Loans Always Require 3.5% Down?
FHA loans typically need 3.5% down if your credit score is above 580. Lower scores may require a 10% down payment.
Are VA Loans Really 0% Down?
Yes. VA loans are truly zero down, though a funding fee applies. No mortgage insurance is required.
Is 20% Down Always Necessary For A Home?
No. That’s a myth. Today, many lenders accept 3% to 5% down payments, depending on the loan type and your financial profile.
Can I Buy A House With No Money At All?
It’s possible with VA loans or certain grant programs, but most buyers will still face closing costs and fees.
Which Mortgage Type Is Best For Low-Income Buyers?
FHA loans are usually best for low-income or credit-challenged borrowers due to lenient credit requirements.