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Buying a Home With a Low Down Payment

Read Time: 5 Minutes August 09, 2023

The down payment is one of the biggest hurdles to homeownership. But with a little creativity and planning, you may be able to buy a home with a low- or even no-down-payment mortgage.

Here are a few options to consider:

  • Government-backed loans: VA loans and USDA loans require no down payment, while FHA loans require a down payment as low as 3.5%. Government Sponsored Enterprises (GSEs), Fannie Mae® and Freddie Mac® also offer 3% down payment options, HomeReady® and Home Possible®.
  • Down payment assistance programs: These programs can provide funds to help cover the down payment or closing costs.
  • Lender-specific programs: Some lenders offer their own low-down payment options or flexible payment plans.

It's important to weigh the pros and cons of each option before making a decision. A low-down payment may make it possible to buy a home sooner, but it could also mean higher monthly mortgage payments.

Here are some things to consider when choosing a low- or no-down-payment mortgage:

  • Your credit score: Some loans have stricter credit score requirements than others.
  • Your income: Your income will need to be high enough to qualify for the loan.
  • Your debt-to-income ratio: Your debt-to-income ratio should be below a certain threshold to qualify for most low or no-down payment loans.
  • Your housing needs: Consider how much home you can afford and what type of loan will best meet your needs.

Do your research and compare different loan options to find the best fit for your financial situation. With a little planning, you can buy a home even if you don't have a lot of money saved up for a down payment.


Down Payment Assistance Programs

Overall, there are options available for those who may not have a large sum of money to put down on a home. Some are offered by state and local Housing Finance Agencies (HFAs), others by non-profits. With some research and careful consideration, you can find a loan and down payment option that works for you and helps you achieve your dream of homeownership.

Given the recent interagency and cross sectors efforts to close the wealth gap, lenders, government agencies and nonprofits have come to market with programs known as Special Purpose Credit Programs (SPCPs). SPCPs are revolutionizing the path to homeownership for underserved and low- to moderate-income communities.

SPCPs may offer lower down payment requirements, flexible credit score requirements, and down payment assistance.

The Newrez Family of Companies is committed to closing the homeownership gap. We offer a variety of low down payment mortgage products, including Dream Start and SPCP, Freddie Mac BorrowSmart AccessSM. Both of these programs are designed to make homeownership more accessible to borrowers from underserved communities.


How Our Organization Serves Underserved Communities:

We are not only a mortgage lender and servicer; we are committed to being the premier provider of affordable home financing solutions for all communities, our mortgage loan consultants are agents of change where they live and work.  We continue to foster inclusivity and empower our customers and broader communities to thrive through the power of homeownership. Join us as we work towards a future where homeownership is accessible to all, regardless of income or background.

Together, we can break down barriers and pave the way for a more inclusive housing market. Take the first step towards homeownership with us, where we are committed to turning your homeownership dreams into a reality.

Get in touch with us today to learn more about our programs and how we can help you get started on the path to homeownership. Contact us today to learn more.



*Geographic restrictions may apply.

Down payment assistance products may have a higher interest rate or higher finance charges than other loan products which may be available.

Fannie Mae® and HomeReady® are registered trademarks of the Federal National Mortgage Association. Freddie Mac®, Home Possible® and Freddie Mac BorrowSmart AccessSM are registered trademarks of the Federal Home Loan Mortgage Corporation.  The previously mentioned companies and programs are not affiliated with Newrez LLC.


Learn more in our other educational series.

We’ve assembled a treasure trove of jargon-free information to demystify home-financing and arm you with valuable insights and actionable options.

Why Newrez?

Newrez believes the lending business shouldn't just be about home loans - it should be about homeowners. That's why our employees get to know our customer's real needs, through final closing, and beyond.

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