Best Mortgage for Low Down Payment 2020

If you’re like many home buyers, a down payment is the biggest obstacle between you and homeownership. Finding a lender with zero- or low-down-payment loans could be the difference between buying a home now or having to wait months or years. Best Mortgage for Low Down Payment 2020.

The down payment can be one of the biggest obstacles to homeownership. Even in a very modestly priced market, a traditional 20 percent down payment easily amounts to tens of thousands of dollars. Add the various closing costs and a typical home shopper can face a financial goal that is unrealistic at best.

If you’ve got limited cash on hand for a down payment but feel otherwise ready to take on the responsibilities of homeownership, you may only need to find the right program to meet your needs rather than give up on your goal.

What Are the Pros and Cons of Making a Down Payment?

Before you jump into a low or zero down mortgage, carefully consider the possible advantages and disadvantages first. If you are able to make even a small down payment, you will probably save money in the long run.

A down payment offers several advantages, including lower borrowing costs. For one thing, you’ll save on interest charges simply by borrowing less money. The lower the down payment, the higher the risk you are to the lender. Because of this, most lenders offer better rates to borrowers who make more sizeable down payments. Even a 1 percent reduction in your interest rate can net you tens of thousands of dollars in interest savings over the life of the loan.


Bank of America: 

Their Affordable Loan Solution is a fixed-rate product geared toward first time homebuyers or those without a large down payment option. They also work with down payment assistance programs in each state which may be a way to get you an even bigger amount to put down.

  • Minimum credit score: 640
  • Down payment as low as 3%
  • No PMI
  • Cannot own another property at time of purchase
  • Homeowner education may be required for first-time buyers (no charge)
  • A $200 bonus possible if you apply before November 30, 2018.


One of their mortgage options is the Professional Loan which is designed for buyers who are on the cusp of having a higher earning potential—such as those who have just finished school or are just starting in their career. They look at each individual situation to determine eligibility and credit requirements but if you have a score of 720 or higher you could qualify for a zero down mortgage.

  • Minimum credit score varies by situation
  • As low as zero down, with a 720 credit score
  • No PMI
  • Applies to mortgage balances up to $850,000
  • Student loan debt may be excluded from payment ratios


Their Agency Affordable Financing product is in conjunction with the Fannie Mae HomeReady and Freddie Mac Home Possible programs but according to their website buyers may be eligible for reduced insurance rates. You have to complete an online homebuyer education course.

  • As low as 3% down
  • All of the down payment can come from gifts or seller contributions
  • Reduced insurance costs
  • Closing costs can be exchanged for a higher rate on a fixed-rate loan

Costco: Best Mortgage for Low Down Payment 

If it isn’t gallon-sized bottles of ketchup that you need, but a mortgage then Costco Mortgage Services could be a good place to get your home loan. While they aren’t a lender themselves, they facilitate loans with approved lenders and according to their website over 105,000 loans have been funded via their mortgage program. One unique piece of their program is the low origination fees for Costco members that can’t go higher than $350 or Executive level members or $650 for Gold Star members.

  • Minimum credit score : 620
  • As low as 5% down for a conventional loan
  • Low origination fees for Costco members. Capped at $350 for Executive level members and $650 for Gold Star level members

Rocket Mortgage: 

Under the auspices of Quicken Loans, Rocket Mortgage is the company that promises to streamline the mortgage process and provide quick turnaround for both approving a loan and getting the money in your hands. They have several options for people with very low credit scores. They can also underwrite a loan before you decide on a property. In a competitive market this can help you stand out from other buyers because it shows you won’t have issues with financing.

  • Minimum credit score: 580
  • As low as zero down (for qualified buyers)
  • Can underwrite loan before you decide on a house
  • Many options have no pre-payment penalty

NACA: Best Mortgage for Low Down Payment 

The Neighborhood Assistance Corporation of America is a community advocacy organization with a very grassroots mission of making homeownership accessible. They look at each case individually to determine eligibility and are not strictly bound by the usual requirements for credit scores or down payment amounts. Your credit score does not impact the interest rate.

  • No minimum credit score
  • No PMI
  • No closing costs
  • No points/fees
  • Zero money down options
  • Borrower can’t own another home at time of closing

Carrington Mortgage Services: 

Even though Carrington is a smaller lender they provide mortgages in all fifty states and D.C. For low down payment options they provide FHA loans but they have lower minimum credit scores than most of the larger lenders. They also don’t charge an application fee.

  • Minimum credit score:
  • 550 for 10% down
  • 580 for 3.5% down
  • 640 for 5% down with a conventional loan
  • No application fee

SoFi: Best Mortgage for Low Down Payment 

The non-bank lending institution that made a splash a few years ago is still offering their SoFi mortgages and shows no sign of slowing down. They do have a non-borrower paid PMI option for lower down payments but that usually that means the interest rate is higher. If you only plan to be in the home for a short time it may make financial sense to go with that option.

  • Minimum credit score: 660 (680 for jumbo loans)
  • As low as 10% down
  • No origination fees
  • No pre-payment penalties
  • No borrower-paid PMI
  • Property needs to be your primary or secondary home for at least twelve months
  • If you have another loan with SoFi (such as a student loan refinance) you can be eligible for a .125% rate discount on your mortgage


 The Chase DreaMaker product has a slightly lower minimum credit score but can come with reduced insurance rates for qualified buyers. It also has the possibility of a $500 credit if you complete a homebuyer education course (there is no charge for the course). To find out more info go to the Chase mortgages page and scroll to the bottom. (This has been updated to reflect the minimum credit score is 620, not 680 as we were originally told).

  • Minimum credit score: 620
  • As low as 3% down payment
  • Entire down payment can come from outside sources (such as gifts or grants)
  • Reduced insurance compared to standard PMI rates
  • May be eligible to receive $500 if you complete a homebuyer education course.

CitiMortgage: Best Mortgage for Low Down Payment 

Their HomeRun product has similar rules to most other low down payment mortgages but comes with an extra requirement of needing to have one month’s mortgage payment in reserve in the account you use for your monthly payment. If you have an excellent credit score this may be able to be waived.

  • Minimum credit score: 640
  • No PMI
  • One month’s mortgage payment in reserve required
  • Not available in every market
  • Single family home as low as 3% down up to jumbo loan limit ($453,100)
  • Condo or co-op as low as 5% down up to jumbo loan limit ($453,100)
  • As low as 5% down for markets that qualify for the higher jumbo loan limit ($679,650)

Wells Fargo: 

Even though it is called the yourFirst Mortgage product you don’t necessarily have to be a first time buyer to qualify, but it is geared for people who are early in their real estate buying years. Also, in some situations—such as family or roommates—they’ll count the income of other residents in the home as part of the household income even they aren’t borrowers on the loan.

  • Min credit score: 620 (suggested)
  • Willing to accept lower credit scores if higher down payment or other
  • As low as 3% down payment
  • Use gift funds and down payment assistance
  • No area median income requirements

New American Funding: Best Mortgage for Low Down Payment 

Another of the lenders that can write loans for low credit scores, New American Funding can also adjust the payment amounts according to the length of time you want the mortgage to last. If your job or retirement plans means you’ll be in a house for a known amount of time this could work out to be better than the standard 15, 20, or 30 year timeframes.

  • Minimum credit score: 580
  • As low as 3% down
  • Can qualify for a reduced mortgage insurance rate
  • No pre payment penalty
  • Not tied to 15, 20, or 30 year time frame


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