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If you think buying a first home means saving 20 percent and going to a bank, there is good news: you have far more options than that, and several of them need little or even no money down. The trick is knowing which program fits your situation, because the right one can be the difference between buying this year and waiting five more. Here is a clear rundown of the major first-time buyer loan programs and grants for 2026, with the real numbers and who each one is built for.

One thing to keep straight as you read: a loan program is how you finance the home, and a grant or assistance program helps with the cash you bring to closing. Many buyers combine the two. We will cover the loans first, then the assistance.

FHA loans: the flexible workhorse

FHA loans, insured by the Federal Housing Administration, are the most popular path for first-time and lower-credit buyers because they are forgiving. You can qualify with a credit score as low as 580 with 3.5 percent down, or as low as 500 with 10 percent down. (If you're not sure where your number lands, see what credit score you really need to buy a house.) They are generous about where your down payment comes from, accepting gifts and assistance-program funds.

The trade-off is mortgage insurance. FHA loans carry an upfront premium of 1.75 percent of the loan amount plus an annual premium (commonly in the 0.15 to 0.75 percent range), and on most FHA loans that annual premium lasts the life of the loan unless you refinance. FHA loan limits for 2026 start at $541,287 in most areas and go higher in expensive markets. This is a great fit if your credit or savings are still building. You can explore FHA loan programs to see what you might qualify for. For a deeper comparison, see FHA vs conventional loans, and if your credit is rough, buying with bad credit.

Low-down-payment conventional loans: Conventional 97, HomeReady, and Home Possible

You do not need an FHA loan to put little down. Conventional loans backed by Fannie Mae and Freddie Mac have first-time buyer programs that allow as little as 3 percent down (97 percent financing) with a minimum credit score around 620.

There are a few flavors. The standard Conventional 97 has no income limit but generally requires at least one first-time buyer on the loan. HomeReady (Fannie Mae) and Home Possible (Freddie Mac) are built for lower and moderate incomes: HomeReady caps qualifying income at 80 percent of your area's median income, and in exchange offers reduced mortgage insurance and very flexible sources for your down payment. The big advantage of any conventional loan over FHA is that the mortgage insurance is cancellable: once you reach 20 percent equity you can request it be removed, and it falls off automatically at 22 percent. For how much cash you actually need, see how much down payment you really need.

💡 Not sure which one fits you?

My free First-Time Homebuyer Guide walks through credit, financing, and the whole process, and I can help you match the right program to your situation.

→ Download the Free Guide

VA loans: the best deal in housing, if you have earned it

If you are a veteran, an active-duty servicemember, a member of the National Guard or Reserves, or in many cases a surviving spouse, a VA loan is hard to beat. It offers zero down payment and no monthly mortgage insurance, which is a combination no other mainstream loan matches. The VA does not set a minimum credit score, though individual lenders usually look for something in the low-to-mid 600s.

The one cost to know is the VA funding fee, a one-time fee that replaces mortgage insurance. For a first-time VA borrower putting nothing down, it is 2.15 percent of the loan amount, and it can be rolled into the loan. Importantly, the funding fee is waived entirely if you receive (or are eligible to receive) VA compensation for a service-connected disability. You will need a Certificate of Eligibility to prove your entitlement. If you qualify for a VA loan, it should almost always be your first choice.

USDA loans: zero down in the right ZIP code

The USDA's Single Family Housing Guaranteed Loan Program also offers zero down payment, and it is aimed at rural and many suburban areas, which cover more of the map than people expect. There are two catches. First, the home has to be in a USDA-eligible area (there is an official map to check). Second, your household income has to be at or below 115 percent of the area median income. Most lenders look for a credit score around 640.

Instead of PMI, USDA loans carry a 1.00 percent upfront guarantee fee and a 0.35 percent annual fee, both lower than typical FHA mortgage insurance. If you are buying outside a big city core and your income is moderate, USDA is often the cheapest way into a home.

FHA 203(k): buy and renovate in one loan

If the homes in your budget need work, the FHA 203(k) renovation loan lets you finance the purchase and the repairs together with the same low 3.5 percent down. It is a great tool in areas where the affordable homes are the dated ones. I cover it in full in my guide to the FHA 203(k) loan.

Down payment assistance and grants

On top of the loans above, there are thousands of down payment assistance programs run by state and local housing agencies, and most buyers never hear about them. They come as grants, forgivable loans, or 0 percent deferred second mortgages, and they can cover a big share of your down payment and closing costs. They usually pair with one of the loan types above.

Here in Florida, the state runs several through Florida Housing, including the Hometown Heroes program for eligible frontline workers. I break them all down, with the current dollar figures and eligibility, in my guide to Florida down payment assistance programs. Wherever you are buying, check your state and county housing finance agency, because this is real money that many qualified buyers leave on the table.

One more form of help worth asking about is a Mortgage Credit Certificate (MCC), offered by many county housing agencies, which gives you a federal tax credit on a portion of your mortgage interest every year you own the home.

How to choose the right program

Here is the short version. If you have earned a VA benefit, start there; the zero down and no monthly insurance are unmatched. If you are buying in an eligible area with a moderate income, USDA is likely your cheapest zero-down option. If your credit or savings are still building, FHA is the forgiving choice. If your credit is solid and your income is moderate, a HomeReady or Home Possible conventional loan gets you in with 3 percent down and insurance you can eventually cancel. And whichever loan you use, look for down payment assistance to shrink the cash you need at closing.

The best way to know for sure is to run your profile and talk to a lender who offers several of these. It pays to get quotes from several lenders and check current mortgage rates before you commit. Start with our free Mortgage Pre-Approval Readiness Calculator to see where you stand, and read my step-by-step guide to buying a house for how these programs fit into the whole process. You have more paths to a first home than you were told. The right one is often closer than you think.

Frequently Asked Questions

What is the best loan program for first-time home buyers?

There's no single best program, it depends on your situation. If you've earned a VA benefit, start there for its zero down payment and no monthly mortgage insurance. If you're buying in an eligible area with a moderate income, USDA is often the cheapest zero-down option. If your credit or savings are still building, FHA is the most forgiving, and if your credit is solid, a HomeReady or Home Possible conventional loan gets you in with 3 percent down.

Can a first-time home buyer buy with no money down?

Yes, two major programs offer zero down payment: VA loans for eligible veterans and servicemembers, and USDA loans for buyers in eligible areas with household income at or below 115 percent of the area median. Down payment assistance programs can also cover much of the cash on other loan types.

What credit score do you need for a first-time buyer loan?

FHA loans go as low as 580 with 3.5 percent down (or 500 with 10 percent down), conventional first-time buyer programs generally want around 620, and USDA lenders usually look for about 640. VA loans set no official minimum, though most lenders look for something in the low-to-mid 600s.

What's the difference between a loan program and a down payment grant?

A loan program is how you finance the home, such as FHA, VA, USDA, or a conventional loan. A grant or assistance program helps with the cash you bring to closing, and it comes as a grant, a forgivable loan, or a 0 percent deferred second mortgage. Many buyers combine a loan with assistance to shrink their out-of-pocket costs.

Before you shop, it helps to understand the cash beyond the down payment, so read our guide to closing costs every buyer should expect to pay.

Sources

The figures in this article were verified against the authoritative government and agency sources below. Program rules, fees, and limits change over time, so confirm the current details with a participating lender before you act.