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How to Get First Time Home Buyer Loans with Bad Credit Scores and Zero Down Payment

Owning a home is a huge part of the American dream for millions of people, but it can often seem like it's somewhat out of reach. Thanks to the downturn of the economy and the housing market collapse, many people with poor credit scores assume that they'll have to have huge down payments and agree to terrible interest rates in order to even come close to qualifying for a home loan. The reality is that there are several zero down first time home buyer loans may be out there that could make it easier to purchase a home with no money down and still get a decent interest rate. This is one of the main reasons that FTHF created this mortgage portal so 1st-time house buyers with a bad credit history could get a fair shot at becoming a homeowner.

Have you been searching for a zero down bad credit home loan? Most conforming mortgage sources offer loans with no money down, but many will not offer a 100% loan to a person with a poor credit history. Finding a company that extends home loans with no money down at competitive price point that it really is quite amazing to find a source to also take risks with credit standards for $0-down programs. There are a lot of companies that will offer a zero-down mortgage with limited credit, especially if the applicant is a first-time home buyer. Limited credit is one obstacle, but bad credit is a whole different obstacle to overcome. Finding companies to take the risk with no money down home loans for people with low fico scores can be easier said than done. That's exactly why so many people are referred to FTHF because they actually can match people with companies that extend poor credit zero down home loan programs. If you are searching for house financing solutions online, you will quickly realize that there are not that many bad credit first time home buyer opportunities, so this website is a great place to start.

Get Help Now Finding Lenders that Offer Bad Credit Home Loans for First Time Buyers with Little or No Money Down

There are a few different options for those looking into their first home loan. The first is the VA loan, and while not everyone will qualify it's still something that is well worth taking a look at if you're a veteran. Many consumers are under the impression that zero down home financing vanished and is no longer an option. This couldn't be further from the truth as zero-down home loans for poor credit borrowers are still available in certain circumstances. That's why taking 2 minutes of your time to complete the form above will help us pair you mortgage lenders that advertise several zero down loans for first time home buyers with a range of qualified credit scores.

It's no secret that the U.S. government continues to do everything it can to aid and assist your typical first-time home buyer with bad credit in their past. Obviously, the Federal government believes in second chance opportunities when it comes to becoming a homeowner. A first-time home buyer with bad credit scores must be able to show the lending underwriter that they have been able to overcome their credit obstacles and that something has changed to make them a more "responsible" borrower. Yes, the FHA, USDA and VA continue to back new opportunities with first time home buyer programs for bad credit.

The VA loan is available to US Veterans, and it is actually backed and guaranteed by the US government's Department of Veteran's Affairs. It's set up as a way to provide vets with the chance to secure a loan without having to come up with a down payment. It offers 103.3 percent financing as well as up to $6,000 in energy efficient improvements. As such, it can help qualified vets get the loan that they need. Of course, if you aren't a vet then this won't be as much help to you. Luckily, other options do exist. The U.S. government continues to support military families that need a second chance with a poor credit first time mortgage with no down-payment and there is never ever mortgage insurance required either. The VA Dept. has a proven track record with zero down-payment home loans for people with bad credit problems from their past.

$0 Down Loan

Another option is to check out the various loans offered through the USDA home loan programs. Many of these loans actually have very strict income guidelines. Too much income will reduce your chances of receiving a loan. These loans are excellent for those with low to moderate incomes who need to secure a loan with no money down. Additionally, they're even more targeted towards those in rural areas. In most cases USDA approved lenders aren't able to take the credit risks that FHA and VA are with zero down mortgages for first time home buyers across the country. They do have some liberty to make exceptions on 100% financing for people buying in rural zones. Are you looking for a home loan with no down-payment in a rural area? If so, USDA may be the perfect fit for zero down programs in the country. Check your eligibility with the USDA.

There are also several options outside of government-based loan programs that you can look at. For instance, Operation HOPE is set up to bringing assistance to those in low-income areas who may need assistance securing loans with poor credit scores. Clearly Millennials will be more attracted to homeownership if they can get easier access to no money down mortgages. It will be interesting to see if the Trump Administration encourages the no down-payment home loan programs as Bush and Obama did during their tenures in the oval office. Other similar programs have been set up throughout the country by various organizations. Learn more about the Operation Hope for Home Buyers Program.

Find out if Government and Subprime Mortgage Companies Have Zero Down Loan Programs for People with Low Credit Scores

Additionally, there are also some lenders who actually specialize in offering loans to those with low credit scores – loans that could require no money down. Finding the right lender is the first step, and once you do you'll need to spend some time reviewing the terms carefully. While some of these zero down mortgage programs may have a slightly higher interest rate, there are many that are very competitive. The key is understanding everything you're signing before you put your name on the dotted line. FHA has a strong reputation for approving bad credit first time mortgage programs because the underwriter has the discretion to make an exception in respect to qualification.

If you desire a "no money down first-time home loan" insured by FHA, you will have to also obtain down-payment assistance. In most instances, the Federal Housing Administration approves financing up to 96.5%, so that means the average FHA loan requires a 3.5% down-payment. Keep in mind that not all states allow down-payment assistance, so before you get too excited, please make sure that the state you are buying a house in, approves home buying grants or down-payment assistance. Meeting the standards of a down-payment grant can be tricky to meet but no for the same reasons that qualifying for a $0 down home loan can be. The guidelines vary by city and state, so it is important that you research the specific opportunities in your region. The Federal Housing Administration has built a solid reputation in this country insuring low down-payment home loans at an affordable rate.

Simply put, you do have options when you're a first time home buyer with poor credit scores. You may not even need a down payment depending on where you look for an affordable loan that easy on your finances. We suggest you spend a bit of time doing your research and you could be very surprised by the little or no money down loans you uncover. Do your homework and determine if you qualify for a bad credit home loans with no down payment required.

Can I Buy a House with Zero Down Payment?

Buying a home is a huge step in your life, and one of the most important investments you can make. However, in order to buy the right house, you'll need to come up with the funds. Or do you? Zero down home loans have made a huge comeback in recent years as millions of first time home buyers are finding loans with little or no down-payment. Home mortgages are designed to make this possible, but for many the need to raise a large down payment is present and can often be a major hurdle. Not all banks and credit unions off no money down mortgage programs so talking to relevant companies that offer the financing options you seek is essential.

In the past, you would to come up with as much as 20% down in a traditional loan circumstance, but there are various options out there that can reduce the down payment and even some ways that you can eliminate the need to pay for your down payment at all. There are several points you'll want to understand here.

no money down loan
  • First of all, don't overlook mortgages that can lower your down payment requirement. If you seek a home loan with no down-payment from FHA, you will have to find a down-payment grant. Loan programs like FHA can come with a down payment requirement of just 3.5%, making it easier to come up with the funds. Still, that 3.5% can be a considerable amount, but there are ways to come up with it we'll touch on in a minute. For example, if you purchase a home for $200,000, then you would need a $7,000 down-payment for most FHA programs. Gifts are another option that shouldn't be completely overlooked. FHA allows the entire down payment amount to come from gift funds, so if you're lucky enough to have family who want to help, you can certainly go that route. If you already have a loan and want to get rid of PMI on FHA, talk your loan officer to verify you are eligible.
  • VA financing is offered to veterans and their spouses and can require no money down if you meet basic requirements. There could be some fees associated with the loan, but as for a big down payment, vets can often ignore it entirely and simply apply for the loan that they need for their home. Military borrowers love this program because many times they are approved for a $0 down home loan even if they have bad credit in their past. This zero down loan program is guaranteed by the Veterans Administration and Vets don't have to pay mortgage insurance monthly like they would with FHA mortgages. Find out if you meet the requirements of VA home loans for bad credit and no money down.
  • USDA loans are another option. If you're purchasing a property in a rural area and can show that you meet income eligibility requirements, you may get a loan without the need to provide a down payment. The USDA has been helping people buy properties in rural areas with zero down mortgages at a very reasonable interest rate.
  • Fannie Mae and Freddie Mac often times back programs that promote homeownership. In many cases they will approve a zero down mortgage, but they will require mortgage insurance, referred to as PMI. This will hike up your housing expenses as PMI is paid monthly in addition to your mortgage payment, property tax and homeowners insurance.
  • Some other lenders may offer zero down home loan programs, but it's important that you understand that these are generally associated with higher credit scores. The better your credit score, the better the chance that you can secure the loan with no down payment, or a much smaller one. If you had a BK discharged, ask about new finance options with a no-doc loan.
  • There are also numerous grants out there that could provide you with the funds needed for down payments. These grants are often backed by various state and local homebuyer programs, and when you take steps to reduce the down payment you need and combine them with these grants, there's a good chance you can eliminate the need for a down payment. You'll have to live in the home for a set period of time to qualify for most of these grants.

If you're looking into buying a home, you already know how important the down payment is. Luckily, you do have ways to avoid the need to save up tens of thousands of dollars. You just have to know the right steps to take. Remember the points above and you should be able to find the path to home ownership that matters the most to you.


First Time Home does not offer no interest loans, grants or down payment assistance for first time home buyers. is a website that offers information about residential real estate financing and does not guarantee rates or pre-qualification directly or indirectly through representatives or agents. provides a news and information service by offering editorial content related to the mortgage industry.

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