Buying a home without a down payment used to sound like pure fantasy. But the reality of today's real estate market has shifted considerably. Whether you're a first-time buyer watching your peers get keys to their homes or someone who never thought homeownership was within reach, I have news that might surprise you. Exceptional loan programs actually exist right now that can help you purchase your home with little to no money down, even here in Daly City, California.

I've worked with numerous buyers over the years who felt trapped by the traditional 20% down payment requirement. What I've learned is that this obstacle isn't as insurmountable as many believe. The challenge isn't whether these programs exist—they do—it's understanding which ones you actually qualify for and how to navigate the process. Let me walk you through the best options available and show you exactly how to get there.

The True Zero-Down Options: VA and USDA Loans

If we're talking about genuinely zero-down mortgages, there are really two major players: VA loans and USDA loans. The easiest way to buy a house with no money down is through a government-backed zero-down mortgage, such as a VA or USDA loan.

VA Loans for Veterans and Service Members

I've had the privilege of helping many veterans and active-duty service members through the home buying process, and the VA loan program is genuinely remarkable. A VA loan can make it possible for veterans, active-duty service members, and eligible surviving spouses to buy a home with no money down. These loans have more flexible credit requirements and little to no down payment requirements.

Here's what really stands out about VA loans: VA loans allow eligible veterans, active-duty service members, and surviving spouses to purchase a home with 100% financing, no down payment, and no mortgage insurance. That last part—no mortgage insurance—is huge. It saves you a substantial amount every month compared to other programs.

So what do you need to qualify? Most lenders require a minimum credit score of 580 for a no-down-payment VA loan or 640 for a zero-down USDA loan. You'll also need to obtain a Certificate of Eligibility from the VA, but that's a straightforward process.

USDA Loans for Rural and Suburban Buyers

If you're not eligible for a VA loan but you're looking to buy in a rural or suburban area, USDA loans help low- to moderate-income buyers purchase homes in certain rural and suburban areas, often with no money down. Here's something that might surprise many Daly City buyers—areas not marked in orange are considered rural areas, which account for nearly 97% of the country.

That means many of you reading this from Daly City might actually qualify for a USDA loan, even though you might think you're in an urban area. It's worth checking the USDA eligibility map to see if your target property qualifies.

With USDA loans, you'll need to meet income limits and have an acceptable credit score, but the program offers USDA mortgage insurance typically cheaper than FHA or conventional PMI, and interest rates on USDA loans tend to be lower, too.

Low-Down-Payment Options with Down Payment Assistance

Maybe you don't qualify for VA or USDA programs, but you're still light on savings. Don't worry. Options like FHA loans, Freddie Mac's Home Possible, and Fannie Mae's HomeReady programs offer low down payments, grants, closing cost assistance, and more flexible credit and income requirements.

What many people don't realize is that these lower down payment loans can be combined with down payment assistance programs. If your income isn't at the level that most lenders require, programs like HomeReady® and Home Possible® offer loans to buy a home with just 3% down. HomeReady and Home Possible also come with reduced mortgage insurance costs.

California-Specific Down Payment Assistance Programs

Here's where things get really interesting for those of you in Daly City and throughout California. The state has some of the most generous down payment assistance programs in the country. California offers some of the most generous down payment assistance programs in the nation, with grants and loans ranging from $10,000 to over $150,000.

For maximum assistance, the CalHFA Dream For All is unmatched — up to $150,000 with no monthly payment. This is a shared appreciation loan that works for first-generation homebuyers. There's also CalHFA MyHome (up to 3.5% with CalHFA FHA or 3% with CalHFA conventional), CalHFA ZIP closing-cost assistance with CalPLUS loans, Dream For All (up to 20%, max $150,000, when funded), GSFA Platinum (up to 5.5%), and city programs such as Los Angeles LIPA and San Francisco DALP.

The key advantage here is that these programs can be stacked. CalHFA FHA first mortgage + MyHome (3.5% deferred) covers the down payment. You get the assistance to cover what would otherwise require cash out of your pocket.

Understanding the Requirements: What You Actually Need

Let's talk specifics because this is where the rubber meets the road. Different programs have different requirements, but they're all more achievable than you might think.

Credit Score Requirements

First, credit scores. You'll usually need a credit score of at least 640 for the zero-down USDA loan program. VA loans with no money down typically require a minimum credit score of 580 to 620. For FHA loans, which are very accessible for first-time buyers, you need a credit score of at least 580 and a down payment of 3.5%.

The good news? None of these require the 720+ scores that conventional lenders often prefer. If you've been told your credit score disqualifies you, that might not be true for these programs.

Income and Debt-to-Income Ratio

Income limits vary by program and location, but generally these programs are designed for moderate-income buyers. Debt-to-income ratio at or below 40% is typically the threshold. Your income needs to be verified, but as long as you're employed and earning a reasonable wage, you likely fall within acceptable parameters.

The Primary Residence Requirement

These programs are designed for people who want to actually live in their home. The home cannot be a working farm; it has to be a primary residence that you live in. If you're looking to purchase an investment property, these zero-down programs won't work. But if this is your actual home, you're in good shape.

How to Start the Process

Now that you understand your options, here's how to move forward. The process begins with knowing exactly which programs you qualify for. Each program has different eligibility requirements, so you'll want to explore them thoroughly.

I strongly recommend starting by checking HOUSEJET, where you can search available properties and begin understanding the market in your area. From there, you'll want to connect with a lender who specializes in these programs. Not all lenders participate equally in every program, so it's worth shopping around.

Here's what I tell my clients: bring documentation of your income, get a credit report, and honestly assess your financial situation. Be prepared to discuss your employment history and any recent major purchases or debt changes. Lenders want to approve loans—they're not trying to disqualify you. They just need to see that you can responsibly manage the mortgage.

The Trade-Offs You Should Understand

I'd be doing you a disservice if I didn't mention the considerations that come with zero-down financing. Qualifying for no-down-payment home loans often depends on factors like credit score, income limits, and debt-to-income ratio. Borrowers should also weigh the trade-off between higher monthly payments and greater total interest over time compared with loans that require a down payment.

With zero-down financing, you're financing 100% of the home's purchase price. Your monthly payments will be higher than if you'd put down 20%, and you'll pay more total interest over the life of the loan. Additionally, if home values decline, you might owe more than the home is worth for a period of time.

But here's the reality for most buyers I work with: it's better to build equity in your home starting today rather than waiting years to save enough for a 20% down payment. Many of my clients who bought with these programs five or six years ago have already built substantial equity through appreciation and principal payments—far more than they would have saved in that same time period.

Let's Make This Real for Daly City Buyers

I work specifically with buyers here in Daly City, and I've seen firsthand how these programs transform lives. The market here is competitive, and home prices reflect our location near San Francisco. That's exactly why these down payment assistance programs are so valuable for our community.

Whether you're a teacher, healthcare worker, small business owner, or anything in between, there's likely a program that fits your situation. The key is understanding what's available and getting connected with a lender who knows how to navigate these specific programs.

Your Next Step

The dream of homeownership doesn't have to remain a dream. These programs exist because policymakers recognize that down payment requirements shouldn't be the barrier that keeps hardworking people out of their own homes.

If you're ready to explore your options, I'd love to help you navigate this process. With my experience working with Daly City buyers and my knowledge of current loan programs, I can help you identify which options make sense for your specific situation. Let's schedule a consultation and talk about turning your homeownership goals into reality—with little or no money down.

The first step is simply reaching out. After that, we'll work through your specific circumstances and identify the programs that work best for you.