One of the biggest myths that prevents people from buying a home is the assumption that they must have a 20% down payment. However, buying a house with no down payment (or a very small amount) is possible through both government and non-government home loan programs, which require 3.5% or less to purchase a home. In addition to offering lower down payment options, borrowers may also benefit from the expanded qualification guidelines that often come with these loans.

FHA loans

The down payment on an FHA loan can be as low as 3.5% with a minimum credit score of 580, or 10% for credit scores of 500 to 579. Insured by the Federal Housing Administration, this government-backed loan is a popular option for many first-time homebuyers or individuals with less than perfect credit.

VA loans

Another government-backed loan with even lower down payment options is a VA Loan. No down payment is required if the sale price of the home is not more than the appraised value of the property and the buyer qualifies for the program. Active duty personnel, as well as Reservists, National Guard members, and certain surviving spouses can be eligible for this type of loan.

Fannie Mae 97% LTV options

There are two loan programs offered through Fannie Mae (the Federal National Mortgage Association) with down payment options of 3%. Their standard program requires at least one of the borrowers to be a first-time homebuyer. However, their HomeReady loan doesn’t have this requirement and also allows the down payment to come from sources such as gifts, grants and subsidies.

Freddie Mac home possible mortgages

Freddie Mac (the Federal Home Loan Mortgage Corporation) offers the Home Possible Mortgage with a down payment requirement as low as 3%.The money for the down payment can come from family members, employer-assistance programs, secondary financing and even sweat equity.