7 Best Lenders for Low- and No-Down-Payment Mortgages of 2022 - NerdWallet Advertiser disclosure

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7 Best Lenders for Low- and No-Down-Payment Mortgages of 2022

Compare lenders that offer low- and no-down-payment mortgages, and learn about their pros and cons.Abby Badach Doyle Oct 3, 2022 Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money. If you're like many home buyers, a down payment is one of the biggest obstacles between you and homeownership. Finding a lender with low- or no-down-payment mortgages could be the difference between buying a home now or having to wait months or years. VA loans, backed by the Department of Veterans Affairs, and USDA loans, guaranteed by the U.S. Department of Agriculture, require no down payment for qualified buyers. FHA loans, insured by the Federal Housing Administration, require down payments as low as 3.5%. And even today's conventional loans allow down payments as low as 3%. Some lenders have their own proprietary programs that are competitive with government loans in terms of both down payment requirements and application criteria. Putting less money down could mean buying a home sooner. But lower down payments have disadvantages, too, such as higher monthly mortgage payments, so it's important to understand and compare options before buying a home. If you're like many home buyers, a down payment is one of the biggest obstacles between you and homeownership. Finding a lender with low- or no-down-payment mortgages could be the difference between buying a home now or having to wait months or years. VA loans, backed by the Department of Veterans Affairs, and USDA loans, guaranteed by the U.S. Department of Agriculture, require no down payment for qualified buyers. FHA loans, insured by the Federal Housing Administration, require down payments as low as 3.5%. And even today's conventional loans allow down payments as low as 3%. Some lenders have their own proprietary programs that are competitive with government loans in terms of both down payment requirements and application criteria. Putting less money down could mean buying a home sooner. But lower down payments have disadvantages, too, such as higher monthly mortgage payments, so it's important to understand and compare options before buying a home.

Best Lenders for Low- and No-Down-Payment Mortgages

LenderNerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.Min. credit score Minimum credit score on top loans; other loan types or factors may selectively influence minimum credit score standardsMin. down paymentLearn more New American Funding NMLS#6606Learn more at New American Funding 4.5/5 Best for overall lending experience620 FHA:500JUMBO:N/AUSDA:640VA:500CONVENTIONAL:6203%New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois.Learn more at New American Funding Northpointe NMLS#447490Learn more at Northpointe 4.5/5 Best for first-time home buyers620 CONVENTIONAL:620JUMBO:680USDA:620FHA:620VA:6205%Northpointe Bank offers conventional loans for as little as 5% down.Learn more at Northpointe Carrington NMLS#2600Read review 4.5/5 Best for FHA loans620 VA:500CONVENTIONAL:620FHA:500JUMBO:N/AUSDA:5505%Carrington Mortgage Services offers conventional loans for as little as 5% down.Read review Caliber NMLS#15622Read review 3.5/5 Best for VA loans620 VA:580USDA:N/AFHA:580CONVENTIONAL:620JUMBO:6803%Caliber offers conventional loans with as little as 3% down.Read review Homebridge NMLS#6521Read review 3.5/5 Best for VA loans620 FHA:550USDA:550CONVENTIONAL:620JUMBO:N/AVA:5503%Homebridge offers conventional loans for as little as 3% down.Read review Guild Mortgage NMLS#3274Read review 3.5/5 Best for FHA loans620 VA:N/AUSDA:N/AJUMBO:N/AFHA:N/ACONVENTIONAL:6203%Guild Mortgage offers conventional loans with as little as 3% down.Read review Flagstar NMLS#417490Read review 5.0/5 Best for flexible mortgage programs620 USDA:660VA:660JUMBO:N/AFHA:640CONVENTIONAL:6203%Flagstar offers 3% down payments on conventional loans for first-time home buyers.Read reviewLearn more at New American Funding

New American Funding NMLS#6606

4.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 FHA:500JUMBO:N/AUSDA:640VA:500CONVENTIONAL:620 Min. down payment3% New American Funding works with down payment assistance programs in 14 states, including California, Texas, Florida and Illinois. View details Learn moreat New American Funding View details Why we like it Government loans account for more than a quarter of New American Funding's loan originations, according to the latest federal data. Pros Offers a proprietary loan program. Cons Mortgage origination fees tend to be on the high end, according to the latest federal data.Read Full ReviewLearn more at Northpointe

Northpointe NMLS#447490

4.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 CONVENTIONAL:620JUMBO:680USDA:620FHA:620VA:620 Min. down payment5% Northpointe Bank offers conventional loans for as little as 5% down. View details Learn moreat Northpointe View details Why we like it Northpointe offers two proprietary mortgages with $0 down, which is rare among the lenders we surveyed. Pros Offers two proprietary loan programs. Cons Origination fees are on the high side, according to the latest data.Read Full ReviewRead review

Carrington NMLS#2600

4.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 VA:500CONVENTIONAL:620FHA:500JUMBO:N/AUSDA:550 Min. down payment5% Carrington Mortgage Services offers conventional loans for as little as 5% down. View details Read reviewView details Why we like it Government-backed loans make up about half of Carrington's loan originations, according to the latest federal data. Pros FHA loans make up 26% of Carrington's loan originations. VA loans make up 18% of Carrington's loan originations. Offers a proprietary loan for borrowers with low credit scores and high debt-to-income ratios. Cons Has only six branch locations.Read Full ReviewRead review

Caliber NMLS#15622

3.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 VA:580USDA:N/AFHA:580CONVENTIONAL:620JUMBO:680 Min. down payment3% Caliber offers conventional loans with as little as 3% down. View details Read reviewView details Why we like it Government-backed loans make up about a third of Caliber's loan originations, according to the latest federal data. Pros VA loans make up 14% of Caliber's loan originations. FHA loans make up 17% of Caliber's loan originations. Cons Rates not available online.Read Full ReviewRead review

Homebridge NMLS#6521

3.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 FHA:550USDA:550CONVENTIONAL:620JUMBO:N/AVA:550 Min. down payment3% Homebridge offers conventional loans for as little as 3% down. View details Read reviewView details Why we like it Government-backed loans make up about a quarter of Homebridge's loan originations, according to the latest federal data. Pros Offers FHA 203(k) loans, a low-down-payment renovation mortgage option. Cons Doesn't post interest rates on its site.Read Full ReviewRead review

Guild Mortgage NMLS#3274

3.5NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 VA:N/AUSDA:N/AJUMBO:N/AFHA:N/ACONVENTIONAL:620 Min. down payment3% Guild Mortgage offers conventional loans with as little as 3% down. View details Read reviewView details Why we like it Government-backed loans make up more than a quarter of Guild's loan originations, according to the latest federal data. Pros Offers home loans for manufactured homes, which can be a more affordable path to homeownership. Offers FHA 203(k) mortgages, a low-down-payment option for renovation loans. Cons Does not offer home equity loan products. Origination fees tend to be on the higher end, according to the latest data.Read Full ReviewRead review

Flagstar NMLS#417490

5.0NerdWallet rating NerdWallet's ratings are determined by our editorial team. The scoring formula takes into account loan types and loan products offered, online conveniences, online mortgage rate information, and the rate spread and origination fee lenders reported in the latest available HMDA data.Min. credit score620 USDA:660VA:660JUMBO:N/AFHA:640CONVENTIONAL:620 Min. down payment3% Flagstar offers 3% down payments on conventional loans for first-time home buyers. View details Read reviewView details Why we like it Flagstar's Destination Home mortgage requires no down payment, which is rare among the lenders we surveyed. Pros Offers a proprietary 0% down mortgage loan. Cons Operates only in California, Indiana, Michigan, Ohio and Wisconsin.Read Full Review

Pros and cons of low- and no-down-payment home loans

The pros: You don't have to wait until you have saved enough money for a large down payment. That means you can become a homeowner and start building equity more quickly. The cons: Low- and no-down-payment mortgages include extra expenses. Conventional loans with down payments of less than 20%, along with FHA and USDA loans, require buyers to pay for mortgage insurance, which protects the lender in case the borrower defaults. VA loans have a one-time VA funding fee. A low- or zero-down-payment mortgage means you will start your homeownership journey with little to no equity in the home. If your home declines in value, you can end up owing more than the property is worth. Your interest rate and monthly mortgage payment could also be higher with a low-down-payment mortgage. » MORE: Check out first-time home buyer programs in your state

Credit score requirements for low- or no-down-payment mortgages

FHA loans: To qualify for a 3.5% payment on an FHA loan, you’ll need at least a 580 credit score. With a score between 500 and 579, you’ll need a 10% down payment. Conventional loans: On low-down-payment conventional loans, a 620 score or better is generally required. Some conventional loans, such as HomeReady and Home Possible, are geared to low-income borrowers. VA loans: VA loans cater to borrowers with military connections. The required credit score for VA loans varies by lender, but many ask borrowers to have at least a 620 or have other qualifications. USDA loans: USDA loans are for buyers in rural and some suburban areas. Applicants with credit scores of 640 and higher can qualify for streamlined processing. Those with lower scores have to go through a more rigorous underwriting process. Applicants with no credit score or limited credit histories can qualify for USDA loans with nontraditional credit information, such as rental and utility payments. » MORE: How your credit score affects your mortgage rate More from NerdWallet Mortgage calculator Compare mortgage rates Tips for finding the best mortgage lender Last updated on October 3, 2022

Methodology

The star ratings on this page reflect each lender's overall star ratings. Read more about how we determine those ratings. The lenders on this page are chosen using this methodology: NerdWallet reviewed nearly 60 mortgage lenders, including the majority of the largest U.S. mortgage lenders by annual loan volume (lenders had to have at least a 1% market share), lenders with significant online search volume and those that specialize in serving various audiences across the country. For inclusion in this roundup, lenders must have an overall score of 4 or higher. FHA, USDA and VA loans must each make up at least 1% of the lender's loan volume, according to the latest HMDA data or FHA and VA loans must each make up at least 1% of the lender's volume and the lender must offer a proprietary mortgage program with a minimum down payment of 3% or less or for borrowers with less than a 580 credit score. NerdWallet solicits information from reviewed lenders on a recurring basis throughout the year. All lender-provided information is verified through lender websites and interviews. We also utilized 2021 HMDA data for origination volume, origination fee, rate spread and share-of-product data. To recap our selections...

NerdWallet' s Best Lenders for Low- and No-Down-Payment Mortgages of 2022

New American Funding: Best for overall lending experienceNorthpointe: Best for first-time home buyersCarrington: Best for FHA loansCaliber: Best for VA loansHomebridge: Best for VA loansGuild Mortgage: Best for FHA loansFlagstar: Best for flexible mortgage programs

Frequently asked questions

What is the lowest down payment for a mortgage? You may be able to get a conventional loan with a down payment as low as 3%. An FHA loan, which is insured by the Federal Housing Administration, requires a minimum down payment of 3.5%. Some loans — such as VA and USDA loans — can be secured with no money down.Are there income limits on no-down-payment mortgages? Sometimes, but not always. Some mortgages have income limitations depending on where the property is located, like USDA loans, which are guaranteed by the United States Department of Agriculture. VA loans, backed by the Department of Veterans Affairs, have no income restrictions.Which loan programs do not require a down payment or private mortgage insurance? VA and USDA loans may allow you to purchase a home with no down payment or mortgage insurance. Both of these loans have fees that cover the cost of foreclosure in the event you default on the mortgage loan, however.Do I have to be a first-time home buyer for a low- or no-down-payment mortgage? No, low-down-payment mortgages aren't limited to first-time home buyers. FHA loans are popular with first-time home buyers because of the minimum 3.5% down payment requirement and relaxed credit score requirements. With some 3% down conventional loans, such as HomeReady and Home Possible, a homeowner education course is required if all borrowers are first-time home buyers.

About the author

Abby Badach Doyle

Abby Badach Doyle writes about homebuying and mortgages for NerdWallet. Read moreEmailLinkedIn