Think you need tens of thousands of dollars saved up before you can buy a home? Think again. One of the most common myths in real estate is that you need a 20% down payment to purchase a house—but in reality, that outdated idea keeps way too many people from even exploring homeownership.
The truth? There are proven ways to buy your first home with little to no money out of pocket—especially if you’re willing to think strategically and leverage powerful tools like house hacking, low-down-payment loans, and assistance programs.
In this article, we’ll break down exactly how first-time buyers are getting into real estate with $0 down—and how you can do the same.
Spoiler: You don’t have to be rich. You just have to be smart.
Myth-Busting: The 20% Down Payment
For decades, aspiring homeowners have been told they need to save up 20% of the home’s purchase price before even thinking about buying. That means a $300,000 home would require a $60,000 down payment—no small feat, especially for first-time buyers.
But here’s the truth:
That 20% figure is not a requirement—it’s just one option.
In fact, millions of homeowners have successfully purchased property with far less up front—or even nothing at all—thanks to flexible lending programs and down payment assistance.
So why does this myth persist?
- Outdated financial advice passed down generationally.
- Misunderstanding of mortgage types and eligibility.
- A fear-based belief that renting is “safer” until more money is saved.
“You don’t need to be wealthy—you just need to be informed.”
By shifting your mindset—and knowing where to look—you can step into homeownership sooner than you ever imagined.
$0 Down Financing Options That Actually Work
Yes, $0-down home buying is real—and it’s more accessible than most people think. There are several government-backed loan programs designed specifically to help first-time buyers get into a home with little to no upfront cash.
Let’s break down the most popular (and powerful) options:
✅ VA Loans
- $0 down with no private mortgage insurance (PMI).
- Backed by the Department of Veterans Affairs.
- Available to eligible veterans, active-duty service members, and some surviving spouses.
✅ USDA Loans
- $0 down for homes in designated rural and suburban areas.
- Backed by the U.S. Department of Agriculture.
- Income limits apply, but many qualify without realizing it.
✅ FHA Loans + Down Payment Assistance (DPA)
- FHA loans require just 3.5% down—but many first-time buyers can pair them with DPA programs to cover that amount, effectively making it $0 out of pocket.
- DPAs can be grants, deferred loans, or forgivable second mortgages depending on your state or city.
Table: Popular $0 or Low-Down Options for First-Time Buyers
| Loan Type | Down Payment | Key Requirement |
|---|---|---|
| VA Loan | $0 | Military service eligibility |
| USDA Loan | $0 | Property in rural/suburban area |
| FHA + DPA | 0–3.5% | Income limits, first-time buyer |
“The right loan program can turn homeownership from a dream into a done deal.”
These options become even more powerful when combined with house hacking—a strategy we’ll dive into next.
House Hacking Makes $0 Down Even Smarter
Getting into a home with little or no money down is already a win. But when you combine that with house hacking, you’re not just buying a place to live—you’re investing in a source of income from day one.
What is house hacking?
It’s when you buy a property and rent out part of it to help cover your mortgage. You could:
- Rent out a basement or spare room
- Buy a duplex, triplex, or fourplex and live in one unit while renting the others
- Host short-term renters through Airbnb while keeping your privacy
Why it works so well with $0-down strategies:
- FHA, VA, and USDA loans can be used on multi-unit properties (up to 4 units), making house hacking 100% viable.
- Rental income can help you qualify for a larger loan.
- Your out-of-pocket monthly cost can drop to $0—or even become positive cash flow.
“With the right property and loan, you can live for free—and build equity at the same time.”
For a deeper breakdown of how people are pulling this off, explore How To Buy Your First Home with $0.
Down Payment Assistance Programs (DPAs)
Even if you don’t qualify for a VA or USDA loan, you still have powerful tools at your disposal. Down Payment Assistance Programs (DPAs) can help cover or eliminate the upfront costs of buying a home—especially for first-time buyers.
These programs can come in several forms:
- ✅ Grants – Free money that doesn’t need to be repaid.
- ✅ Deferred Loans – Loans you don’t repay until you sell or refinance.
- ✅ Forgivable Loans – Loans that are erased after a few years of ownership.
Where can you find DPA programs?
- State and local housing authorities
- Nonprofit housing organizations
- Employer homebuyer benefit programs
- Your real estate agent or mortgage broker may also have access to niche regional offers
Pro Tip: Many DPAs can be used alongside FHA loans to reduce your upfront cost to nearly zero.
“Don’t let a down payment keep you down—there are programs designed to lift you up.”
To get a head start, check out House Hack Tips for First-Time Buyers, where we walk through creative strategies for starting small and smart.
What Lenders Really Look For
Even with $0-down options, lenders still need to ensure you’re financially ready to take on a mortgage. Fortunately, the criteria are often more flexible than most people think—especially for first-time buyers and house hackers.
Here are the key things lenders focus on:
✅ Credit Score
- FHA loans allow scores as low as 580 (sometimes lower with higher down payments).
- VA and USDA loans typically require 620+, but exceptions exist.
- Higher scores can unlock better interest rates—but don’t let a less-than-perfect score hold you back from applying.
✅ Debt-to-Income Ratio (DTI)
- This measures how much of your income goes toward debt payments.
- Most programs want to see a DTI below 43%, but house hacking can help:
- Rental income from tenants may count toward your income, improving your ratio.
✅ Income Stability
- Lenders like to see at least 2 years of steady income.
- Self-employed? You may need to show business income through tax returns.
- Rental income can count here too, especially with proper documentation.
“When you add house hacking to your financial profile, you’re not just buying a home—you’re building a stronger loan application.”
By understanding what lenders really care about, you can focus your efforts where it matters—and move one step closer to getting approved.
Step-by-Step Guide to Getting Started
Now that you know it’s possible to buy a home with $0 down, it’s time to take action. Here’s a simple, actionable roadmap to help you move from curious to homeowner—even as a first-time buyer:
1. Get Pre-Approved
Talk to a mortgage lender who understands first-time buyer programs and house hacking strategies. A pre-approval helps you understand your loan options and sets your home search budget.
2. Explore Loan and Assistance Options
Ask your lender about:
- VA, USDA, or FHA loans
- Local or state Down Payment Assistance Programs (DPAs)
- Whether you can use rental income to qualify for a larger loan
3. Define Your House Hack Strategy
Decide what house hacking model fits your comfort zone:
• Renting a room?
• Buying a duplex?
• Airbnb part-time?
The right strategy depends on your goals and market.
4. Start Your Property Search
Look for homes that align with your plan—think location, layout, and rental potential. Prioritize multi-unit properties or homes with separate entrances or basement spaces.
5. Assemble Your Team
Connect with a real estate agent, lender, and possibly a CPA or house hack-savvy advisor. The right team can save you thousands and keep your plan on track.
“You don’t need the perfect home to get started—just the right plan to make it work for you.”
Conclusion
Buying your first home with $0 down isn’t just a dream—it’s a real, achievable goal when you use the right tools. With the help of VA, USDA, or FHA loans, Down Payment Assistance Programs, and smart strategies like house hacking, you can skip the giant savings hurdle and start building wealth right now.
This isn’t about shortcuts—it’s about working smarter, using what’s available, and turning your home into a launchpad for financial freedom.
“You don’t need to wait until you’re rich to buy a home—buying the right home can help you get there.”
If you’re ready to take your first step, explore the full set of resources, real-life examples, and strategies at HouseHackTips.com—your go-to guide for House Hacking Basics, first-time buyer tips, and beyond.