Saving for a down payment on a home can be a major hurdle, but it doesn’t have to be. There are now many low- and no-down-payment mortgage options available to help prospective homebuyers get into their dream home sooner. CNBC Select has analyzed the top lenders offering mortgages with down payments of 3.5% or less and selected the best seven based on down payment requirements, rates, types of loans, customer service, and other factors.
Key Takeaways:
- No down payment options: Guild Mortgage offers both the Zero Down Mortgage and the Arrive Home™ loan, both of which allow borrowers to bypass the down payment requirement entirely.
- Affordability: New American Funding offers a conventional mortgage with a down payment as low as 3%, and also guarantees closing within 14 business days.
- No lender fees: Ally Home doesn’t charge any lender fees, which can save prospective homebuyers up to $6,000 on a $300,000 mortgage.
- Low-income borrowers: Chase Bank’s DreaMaker℠ loan requires just a 3% down payment for borrowers who make up to 80% of the area median income.
- VA loans: Navy Federal Credit Union offers three no-down-payment options for military families: traditional VA loans, Military Choice, and Homebuyers Choice mortgages.
- USDA loans: PNC Bank is one of the few big banks that offers USDA loans, which are zero-down mortgages available to borrowers in select rural and suburban regions.
- Online lenders: Rocket Mortgage is the largest mortgage provider in the U.S. and offers a 1% down mortgage, making it a great option for first-time homebuyers.
Best for No Down Payment
Guild Mortgage
Guild Mortgage offers a wide variety of loan options, including conventional, FHA, VA, USDA, and jumbo mortgages. Their Zero Down mortgage combines a 3.5% FHA loan with a forgivable second mortgage, effectively lowering the down payment to 0%. Borrowers can be approved with credit scores as low as 600.
Standout Benefits:
- In addition to the Zero Down mortgage, Guild also has the Arrive Home™ loan, another zero-down mortgage option for borrowers who earn up to 160% of the area median income.
- While Guild received an A+ from the Better Business Bureau and scored highly on JD Powers’ 2023 mortgage originator survey, it was ranked near the bottom for mortgage servicing.
Minimum Credit Score & Down Payment:
- Zero Down: 600 credit, 0% down
- Arrive Home: 620 credit, 0% down
- VA or USDA: 0% down
- Conventional: 1% down
Types of Mortgages Offered:
- Conventional
- FHA
- VA
- USDA
- Jumbo
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Best for Affordability
New American Funding
New American Funding offers conventional, jumbo, FHA, VA, and USDA mortgages as well as home equity loans and HELOCs. At the time of writing, their rates were below average for both 15 and 30-year fixed-rate mortgages.
Standout Benefits:
- You can be approved for a conventional mortgage with just a 3% down payment and no mortgage insurance.
- NAF guarantees closing within 14 business days, shorter than any lender on this list.
- While it ranked below average in JD Power’s mortgage origination survey, NAF lands near the top for mortgage servicers and received an A from the Better Business Bureau.
Minimum Credit Score & Down Payment:
- Conventional: 620 credit, 3% down
- FHA: 3.5% down
- VA or USDA: 0% down
Types of Mortgages Offered:
- Conventional
- Jumbo
- FHA
- VA
- USDA
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Best for No Lender Fees
Ally Home
Ally Home offers conventional, jumbo, and HomeReady mortgages. They don’t charge lender fees, which can be as much as 2% of your loan total.
Standout Benefits:
- Ally doesn’t charge any lender fees.
- Ally offers preapproval in as little as three minutes
- They are available in all 50 states.
- Ally is one of the few major lenders offering the Freddie Mac-backed HomeOne® mortgage, which only requires 3% down and has no income requirements.
- If you’re buying in Philadelphia, Detroit, or Charlotte, North Carolina, you may qualify for a $5,000 closing cost grant.
Minimum Credit Score & Down Payment:
- Conventional: 620 credit, 5% down
- HomeReady: 3% down
- HomeOne: 3% down
Types of Mortgages Offered:
- Conventional
- Jumbo
- HomeReady
- HomeOne®
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Best for Low-Income Borrowers
Chase Bank
Chase Bank offers conventional, FHA, VA, jumbo, DreaMaker℠, and Standard Agency mortgages. Their DreaMaker loan could be the perfect low-down-payment mortgage for borrowers who don’t take home a huge paycheck.
Standout Benefits:
- Borrowers who make up to 80% of the area median income can put as little as 3% down on the DreaMaker loan.
- Income requirements have been lifted in 15 metro areas, including New York City, Los Angeles, Atlanta, and Chicago.
- Applicants in those 15 areas can qualify for a $7,500 grant to put towards a down payment, rate buydown, or closing costs.
- Chase also has the Standard Agency loan, a 3%-down mortgage for first-time homebuyers with a 680 credit score.
- Chase guarantees on-time closing in as little as 21 days or eligible homebuyers may get a $5,000 rebate.
Minimum Credit Score & Down Payment:
- DreaMaker: 620 credit, 3% down
- Standard Agency: 680 credit, 3% down
- Conventional: 620 credit,
- FHA: 580 credit, 3.5% down
Types of Mortgages Offered:
- Conventional
- FHA
- VA
- Jumbo
- DreaMaker
- Standard Agency
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Best for VA Loans
Navy Federal Credit Union
Navy Federal Credit Union offers conventional, VA, Military Choice, and Homebuyers Choice mortgages. They are the largest credit union in the U.S., but membership is limited to active service members, veterans, Reservists, Defense Department staff, and their families.
Standout Benefits:
- Navy Federal offers three no-down-payment options for military families.
- Their 1.00% origination fee can be waived if you opt for a 0.25% rate increase instead.
- Borrowers can apply with non-traditional credit sources, like rent and utility bills.
- If you find a better rate with a competitor, Navy Federal will match it or give you $1,000 after you close.
- Homebuyers who buy a house through Navy Federal’s RealtyPlus program can receive up to $9,000 in cash back.
Minimum Credit Score & Down Payment:
- VA, Military Choice, or Homebuyers Choice: 0% down
- Conventional: 3% down
Types of Mortgages Offered:
- Conventional,
- VA
- Jumbo
- Military Choice
Homebuyers Choice
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Best for USDA Loans
PNC Bank
PNC Bank offers conventional, FHA, VA, USDA, jumbo, and doctor loans as well as the PNC Community Loan. They have more than 2,300 retail locations in 28 states, although they service mortgages nationwide.
Standout Benefits:
- PNC is one of the few big banks that offers USDA loans – zero-down mortgages for properties in select rural and suburban regions.
- PNC has an A+ rating from the Better Business Bureau and scored above average in JD Power’s 2023 U.S. Mortgage Servicer Satisfaction Survey.
Minimum Credit Score & Down Payment:
- USDA or VA: 0% down
- FHA: 3.5% down
- Conventional: 620 credit, 3% down
Types of Mortgages Offered:
- Conventional
- FHA
- VA
- USDA
- Jumbo
- Doctor Loans
PNC Community Loan
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Best Online Lender
Rocket Mortgage
Rocket Mortgage offers conventional, FHA, VA, jumbo, HomeReady, and Home Possible mortgages. Rocket is the largest mortgage provider in the U.S. and continually tops JD Powers’ mortgage satisfaction surveys.
Standout Benefits:
- Rocket Mortgage offers a 1% down loan that doesn’t require private mortgage insurance.
- They offer verified approval in as little as two hours, with an average closing time of 22 days, nearly half the industry average.
- Rocket offers government-backed HomeReady and Home Possible loans, which only require a 3% down payment.
Minimum Credit Score & Down Payment:
- Rocket ONE+: 620 credit, 1% down
- HomeReady or Home Possible: 3% down
- FHA: 580 credit, 3.5% down
- VA: 0% down
Types of Mortgages Offered:
- Conventional
- FHA
- VA
- Jumbo
- HomeReady
- Home Possible
Rocket ONE+
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Pros and Cons of a Low Down Payment
Pros:
- You’ll be able to buy faster and afford a more expensive house.
- More money available for moving, repairs and other costs.
- Unused funds can be invested and earn a higher return.
Cons:
- Your mortgage rate could be higher.
- Your monthly payments will be larger.
- You’ll start with less home equity.
You will probably have to pay mortgage insurance.
Common Types of Low-Down-Payment Mortgages
There are several home loans guaranteed by the federal government.
| Minimum down payment | Eligibility | Minimum credit score | |
|---|---|---|---|
| VA loan | 0% | Active-duty U.S. service members, veterans, Reserves, National Guard, and eligible surviving spouses | 620 |
| FHA loan | 3.5% | Debt-to-income ratio of 43% or less (up to 50% in some cases) | 580 with 3.5% down or 500 with 10% down |
| USDA loan | 0% | No more than 115% area median income, property in a qualifying area | Typically 640 |
| HomeReady mortgage | 3% | No more than 80% of the area median income | 620 |
| Home Possible® mortgage | 3% | No more than 80% of the area median income | 660 |
| HomeOne® mortgage | 3% | First-time homebuyers (no income requirement) | 660 |
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Why Trust CNBC Select?
At CNBC Select, our mission is to provide readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every mortgage lender review is based on rigorous reporting by our team of expert writers and editors. While we earn a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties. We pride ourselves on our journalistic standards and ethics.
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Our Methodology
To determine which mortgage lenders are the best, CNBC Select analyzed dozens of U.S. mortgages offered by both online and brick-and-mortar banks. We focused on the following features:
* **Fixed-rate APR:** With a fixed rate APR, you lock in an interest rate for the duration of the loan’s term, which means your monthly payment won’t vary, making your budget easier to plan.
* **Types of loans offered:** We considered lenders offering conventional loans, FHA loans, VA loans, USDA loans, and jumbo loans.
* **Closing timeline:** We evaluated lenders with closing timelines ranging from two weeks to 45 days after the home purchase agreement has been signed.
* **Fees:** We considered lenders who charge origination fees, application fees, underwriting fees, processing fees, and administrative fees.
* **Flexible minimum and maximum loan amounts/terms:** We considered lenders offering a wide range of financing options to suit a variety of borrower needs.
* **No early payoff penalties:** The mortgage lenders on our list do not charge borrowers for paying off the loan early.
* **Streamlined application process:** We considered lenders offering a convenient, fast online application process and/or an in-person procedure at local branches.
* **Customer support:** Every mortgage lender on our list provides customer service via telephone, email, or secure online messaging. We also looked for lenders with an online resource hub or advice center.
* **Minimum down payment:** We considered lenders offering additional specialty loans that come with a lower minimum down payment amount.
After reviewing the above features, we sorted our recommendations by best for no down payment, affordability, no lender fees, low-income borrowers, VA loans, USDA loans, and online lenders.
**Editorial Note:** Opinions, analyses, reviews, or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved, or otherwise endorsed by any third party.
