Most zero-down mortgages come with a service requirement: VA loans are for veterans and military families. The big exception is the USDA guaranteed loan — the Department of Agriculture's program for buyers in eligible rural and suburban areas, and the main way a non-veteran can still buy a home with truly nothing down.

How the program works

In the guaranteed program, the USDA is not your lender. You borrow from a regular mortgage lender, and the federal guarantee standing behind the loan is what lets that lender offer 100% financing — a 30-year fixed loan with no down payment — along with more forgiving credit standards than conventional lending typically carries.

The program's purpose shapes its rules. It exists to support homeownership in rural communities, and it is aimed at low- and moderate-income households — which surprises people who assume a mortgage program screens for high earners. This one screens them out: earn too much and you are not eligible.

Two eligibility tests: the property and your income

First, the property. It must be in a USDA-eligible area, and "rural" is broader than it sounds: beyond farm country, many small towns and suburban-fringe areas qualify. Do not guess from the word — look the address up on the USDA's property-eligibility site, which lets you check any specific address.

Second, your household income, measured against limits that vary by county and household size. There is no universal dollar figure worth quoting, because the ceiling in one county is not the ceiling in the next; the same USDA eligibility site publishes the limits for yours.

What it costs

Zero down does not mean zero cost. The program charges two fees, and for federal fiscal year 2026 they are:

  • An upfront guarantee fee of 1.00% of the loan amount, charged at closing.
  • An annual fee of 0.35%, billed as part of your monthly payment rather than once a year.

The fee schedule is reviewed each federal fiscal year, but the rates in effect when you close stay fixed for the life of your loan. The structure resembles FHA mortgage insurance — something upfront, something ongoing — but the USDA's annual fee runs lower than FHA's ongoing premium, which is part of why the program is such a strong deal for buyers who fit its maps.

Closing costs are the other reality: appraisal, title work, and lender fees still apply, typically running 2%–5% of the loan amount. If savings will not cover them, documented gift funds from family are allowed, and sellers can agree to contribute toward closing costs as part of the deal.

The other rules

  • Primary residences only. No second homes, vacation properties, or business and investment property.
  • No cash-out. The program is not a vehicle for pulling equity out of a home you already own.
  • Verification still happens. Credit standards are more forgiving than conventional lending, but lenders review your history, and self-employed borrowers should expect to document income more heavily than W-2 employees.

Rates themselves run competitive with conventional mortgages; the fees above, not a higher rate, are the price of the guarantee.

Where it fits

For a buyer with steady income, modest savings, and an eligible address, the USDA guaranteed loan is one of the strongest deals in American mortgage lending: FHA asks for 3.5% down even at its friendliest, while USDA asks for none. The catch is simply the maps and the income ceilings — many buyers and many homes will not fit. If yours does not, the low-down-payment alternatives are covered in our guide to the best mortgages for a first-time home buyer, and the broader landscape of who lends what is in where to get a loan to buy a home.