How to Buy Your First Home With No Money Down

Can You Buy Your First Home With No Money Down?

The short answer is yes. The full answer depends on which program you qualify for.

Most buyers assume a 20% down payment is required. That idea comes from a specific context: conventional loans without mortgage insurance require 20% equity to avoid PMI. It’s not a universal rule. According to the National Association of Realtors, first-time homebuyers typically put down around 7% on average. With the right loan program, that number can drop to 3.5%, 3%, or zero.

The Colorado median home price was $604,600 as of early 2026, according to Redfin. A 3.5% FHA down payment on that figure is about $21,000. That’s real money, and it takes time to save. But programs exist specifically to reduce or eliminate that requirement, and many Colorado and Florida buyers don’t know those programs apply to them.

The options fall into two groups. First, true zero-down loans: VA loans for veterans and USDA loans for buyers in eligible areas. Second, low-down and assisted options: FHA and conventional programs paired with down payment assistance programs that can cover the upfront cost entirely. In many cases, stacking a government-backed loan with a state or county assistance program gets a buyer to the closing table with very little out of pocket.

VA Loans: Zero Down for Veterans and Service Members

VA loans are the strongest zero-down option available. No down payment is required. There’s no monthly private mortgage insurance. The U.S. Department of Veterans Affairs has guaranteed more than 28 million home loans since the program launched in 1944, making it one of the most proven homebuying tools in the country.

Who qualifies: veterans, active-duty service members, National Guard and Reserve members with sufficient service, and qualifying surviving spouses. To confirm eligibility, you need a Certificate of Eligibility (COE). A lender who knows how VA loans work can pull that in minutes as part of the pre-approval process.

The one cost to plan for is the VA funding fee. It’s a one-time charge that keeps the program self-sustaining. Most borrowers can finance it into the loan rather than paying it at closing. Veterans with a service-connected disability rating are exempt from the fee entirely.

Colorado Springs has one of the highest concentrations of military personnel and veterans in the country, with major installations including Fort Carson, Peterson Space Force Base, and Schriever Space Force Base. We work with veterans across the Front Range regularly, and the same pattern comes up over and over: eligible borrowers who assumed the benefit was gone after a prior home purchase, or who didn’t know surviving spouses could qualify.

The benefit is reusable in most cases. A veteran who sold a prior VA-financed home typically has full entitlement restored. Working with a lender who understands VA guidelines matters more than most buyers realize, because the appraisal process and entitlement calculations follow specific rules that general lenders sometimes handle poorly.

USDA Loans: Zero Down in More Areas Than You’d Expect

USDA loans offer zero-down financing for buyers in eligible rural and suburban areas. The program is backed by the U.S. Department of Agriculture and designed to encourage homeownership outside dense urban centers. The eligible footprint is larger than most buyers picture.

Communities like Fountain, Pueblo West, Monument, and parts of Canon City in Colorado have had many qualifying properties. In Florida, suburban areas outside Miami, Orlando, and Tampa frequently qualify as well. You can verify any specific address through the USDA Single Family Housing Programs eligibility map, or a loan officer can check it during the pre-approval conversation.

Income limits apply. Your household income cannot exceed 115% of the area median income for your county. The limit rises with each additional household member, so larger families often qualify at higher income levels than they expect. Total household income counts, including income from adults living in the home who won’t be on the loan. A full review of USDA loan eligibility requirements is worth doing before ruling this option out.

USDA loans charge an annual guarantee fee of 0.35% of the outstanding loan balance, which is much lower than FHA’s annual mortgage insurance premium. That difference can make a USDA loan’s monthly payment more affordable than FHA at similar interest rates, even though both require zero down. Most lenders look for a credit score of 640 or higher, though some will work with lower scores depending on the full file.

FHA Loans and Low-Down Conventional Options for First-Time Buyers

FHA loans require a minimum 3.5% down payment with a credit score of 580 or higher. With a score between 500 and 579, the minimum rises to 10%. The program accepts lower credit scores than most conventional loans, making it a common starting point for buyers still building their credit history.

FHA loan limits are set by county. In El Paso County, the 2026 FHA loan limit for a single-family home is $541,650. In the Denver metro, Adams, Douglas, and Denver counties all carry a 2026 FHA limit of $862,500 for a 1-unit property, reflecting higher median home prices in those areas. If the home you’re targeting costs more than the FHA limit for your county, FHA won’t cover the gap.

Florida buyers can look up limits for their county below. Most Florida counties carry the 2026 FHA baseline of $541,287 for a single-family home, with higher limits in Monroe County and the South Florida tri-county area.

Conventional loans with 3% down are available through Fannie Mae’s HomeReady program and Freddie Mac’s Home Possible program. Both are income-limited, generally capped at buyers earning at or below 80% of the area median income. Both allow gift funds and down payment assistance to cover the entire contribution requirement. Conventional PMI cancels once you reach 20% equity, which is a meaningful long-term cost advantage over FHA.

FHA carries an upfront mortgage insurance premium of 1.75% of the loan amount, which is typically financed in, plus an annual premium that runs for the life of the loan in most cases. Conventional PMI is cancelable. For a buyer planning to stay put for five or more years, that difference is worth understanding. Your FHA loan requirements still make sense for many buyers, especially those with credit scores below 620, but it’s a trade-off worth knowing before you commit.

Down Payment Assistance Programs in Colorado and Florida

Down payment assistance is available to more buyers than most people realize. These programs aren’t limited to very low incomes. Colorado’s CHFA statewide programs serve households with income up to approximately $162,960 in many counties, which means moderate-income buyers with stable jobs often qualify. Some programs are outright grants. Others are deferred second mortgages with no monthly payment, due only when you sell, refinance, or pay off the first mortgage.

Colorado Programs

The Colorado Housing and Finance Authority (CHFA) runs several programs statewide. The CHFA SmartStep program pairs an FHA, VA, or USDA first mortgage with a down payment grant of up to $25,000 or 3% of the first mortgage amount, whichever is less. The grant doesn’t need to be repaid. The CHFA First Generation program serves buyers who are the first in their immediate family to own a home, with a similar structure. Income and purchase price limits apply to all CHFA programs, and a homebuyer education class is required. Current program details are available through CHFA’s homeownership programs page.

Buyers in El Paso County can also access the El Paso County Turnkey Plus program, a 0% interest second mortgage covering up to 5% of the first mortgage amount with no monthly payment. The first half of the balance is forgiven over the initial five years of the loan. The program covers all of El Paso County, including Colorado Springs, Fountain, and surrounding communities.

In the Denver metro, MetroDPA provides a 0% interest second mortgage with no monthly payment for Front Range buyers. Metro-area buyers who fall outside CHFA income limits sometimes find they’re within MetroDPA’s eligibility range. A knowledgeable Colorado mortgage broker who works with these programs regularly can tell you quickly which combinations apply to your income, location, and loan type.

Florida Programs

Florida Housing Finance Corporation administers several statewide programs for Florida buyers. Their offerings pair with FHA, VA, USDA, and conventional first mortgages and can cover both down payment and closing costs. Income and purchase price limits apply, and program availability shifts as funding levels change. Check current eligibility through Florida Housing’s official site.

No Down Payment Doesn’t Mean No Money at Closing

Down payment and closing costs are two separate expenses. Zero-down doesn’t eliminate closing costs, and on most loans they still add up to several thousand dollars. According to the Consumer Financial Protection Bureau, closing costs typically run between 2% and 5% of the loan amount. On a $300,000 loan, that’s $6,000 to $15,000 due at closing regardless of the down payment amount.

VA loans give buyers meaningful protection here. Certain fees cannot be charged to the veteran beyond specific limits, and sellers can pay the buyer’s closing costs in full. In many VA purchases, negotiating seller-paid closing costs is realistic and common, especially in markets where sellers are motivated.

USDA loans sometimes allow closing costs to be rolled into the loan when the home appraises above the purchase price. This isn’t guaranteed, but it’s worth asking about on every USDA purchase.

FHA allows sellers to contribute up to 6% of the purchase price toward buyer closing costs. In a slower market or with a motivated seller, that concession is often negotiable.

Many down payment assistance programs in Colorado and Florida cover closing costs in addition to the down payment. When you apply for CHFA or any other assistance program, ask specifically whether the funds can apply to closing costs. Not all programs allow it, but many do, and that distinction can mean the difference between closing with a reserve in the bank and cleaning out your savings account entirely.

Getting the full cost picture early in the process, not just the down payment figure, is one of the most useful things a lender can do for you. Buyers who skip this conversation sometimes make it all the way to the closing table before learning what they actually owe that day.

What You Still Need to Qualify

Zero-down doesn’t mean zero requirements. Every program still evaluates credit score, debt-to-income ratio, income stability, and employment history. Knowing where you stand on each tells you which programs are reachable right now versus in six to twelve months.

Credit score minimums by loan type:

• VA loans: No official minimum, but most lenders look for 580 to 620
• USDA loans: Typically 640, with some lenders working below that with compensating factors
• FHA loans: 580 for 3.5% down; 500 for 10% down
• Conventional 3% down programs: 620 minimum, with better pricing above 680

Your debt-to-income ratio (DTI) measures your monthly debt payments against your gross monthly income. Most programs target a DTI at or below 43% to 50%. CHFA programs in Colorado allow up to 50% DTI for borrowers with a mid-FICO of 620 to 659, and up to 55% for scores of 660 or higher.

If your credit score isn’t where it needs to be, that’s fixable. Paying down revolving balances and keeping all accounts current can move a score meaningfully in six to twelve months. Starting that work now gives you access to programs and pricing that simply aren’t available at lower score tiers.

Common Mistakes to Avoid

Questions to Ask Your Lender

• Which zero-down or low-down programs do I actually qualify for based on my credit score, income, and where I’m buying?
• Are there down payment assistance programs in my county I should apply for before the loan process starts?
• Can the assistance I qualify for cover closing costs as well, or only the down payment?
• If I’m using a USDA or VA loan, how does the funding fee or annual guarantee fee affect my total loan amount and monthly payment?
• If I use a down payment assistance program, will it affect the interest rate on my first mortgage?
• If I don’t qualify for the programs I want right now, what specific steps should I take in the next six months?