Buying a first home in 2026 means shopping a tough market: 30-year mortgage rates have spent the year in the mid-6% range, and the median existing home ran about $429,300 as of mid-year. For most first-time buyers the down payment — not the monthly payment — is the wall. The good news: the menu of low- and no-down-payment mortgages is wider than most people realize. Here are six options worth knowing, and when each one makes sense.

FHA loans: the flexible-credit workhorse

Choose it when: your credit score or savings are the obstacle.

Loans insured by the Federal Housing Administration (FHA) are the classic first-time-buyer path because the qualifying bar sits lower than almost anywhere else. With a credit score of 580 or higher, you can put down as little as 3.5% of the purchase price. Scores from 500 to 579 can still qualify, but the required down payment rises to 10%. Those are FHA's floors, though — individual lenders often layer stricter standards on top, so one lender's no isn't every lender's no.

The trade-off is mortgage insurance, which on FHA loans typically runs for the life of the loan at the smallest down payments. FHA also caps how much you can borrow, and the caps reset this year — check the 2026 conforming and FHA loan limits before you set a price range.

Conventional loans with just 3% down

Choose it when: your credit is solid but your savings are thin.

Plenty of buyers still assume a conventional loan means 20% down. It doesn't. Three widely offered programs allow qualified buyers to put down 3%:

  • Fannie Mae HomeReady and Freddie Mac Home Possible, both limited to borrowers earning no more than 80% of their area's median income.
  • Conventional 97, which has no income cap but is generally reserved for first-time buyers.

Lenders typically look for a credit score around 620 or better. You'll pay private mortgage insurance at first, but unlike FHA's insurance, conventional PMI can be dropped once you're past 20% equity — and putting 20% down from the start avoids it entirely.

VA loans: zero down for those who served

Choose it when: you or your spouse serve or served in the U.S. military.

Backed by the Department of Veterans Affairs, VA loans give eligible veterans, active-duty service members and some surviving spouses 100% financing — no down payment at all — at rates competitive with conventional loans, and with no monthly mortgage insurance. That combination is hard to beat, so if you're eligible, price a VA loan first.

USDA loans: zero down beyond the metro core

Choose it when: you're buying in a rural or eligible suburban area.

The Department of Agriculture's guaranteed loan program is the other zero-down route, covering homes in rural areas and many outlying suburbs — the eligibility map reaches farther than the word rural suggests, though income limits apply. For the fiscal year running through September 2026 the program charges a 1.00% upfront guarantee fee and a 0.35% annual fee; the schedule is revisited each fiscal year, and whatever is in effect at closing holds for the life of the loan. Our USDA home loans guide covers eligibility and the fine print.

Adjustable-rate mortgages: today's 5/6 SOFR ARM

Choose it when: you fully expect to sell or refinance within the fixed period.

The old 5/1 ARM tied to LIBOR is retired. The standard adjustable today is the 5/6 SOFR ARM — alongside 7/6 and 10/6 versions — fixed for the first five, seven or ten years, then adjusting every six months. The appeal is a starting rate below the 30-year fixed. The risk arrives when the fixed period ends: if selling or refinancing doesn't happen on schedule, the payment can climb twice a year. Compare the ARM's start rate against a fixed quote before assuming it's the cheaper path — sometimes the discount is too thin to justify the uncertainty.

State and local down-payment help

Choose it when: a program where you live fits your income and price point.

Nearly every state offers homebuyer assistance through its housing finance agency — down-payment grants, forgivable second loans, below-market rate programs, mortgage credit certificates that trim federal taxes. Cities and counties often add their own. The specifics change constantly, which is exactly why we won't list programs here: look up your state's housing finance agency by name and read what's currently offered. Assistance can usually be paired with an FHA, VA, USDA or conventional loan, so research it in parallel, not instead.

How to choose

Work down the list by eligibility: VA if you've served, USDA if the map and income limits fit, then weigh FHA against a 3%-down conventional based on your credit score and how long you expect to keep the loan. Whichever program wins, the lender matters as much as the loan type — quotes for the same borrower vary widely on any given morning, so collect several before you commit. And to anchor expectations on where rates stand and where they may head, start with our 2026 mortgage rate outlook.