Down payment requirements stop a lot of first-time buyers cold.
But there's a government-backed mortgage program that lets qualified borrowers put down exactly $0 and still finance the closing costs.
It's run by the US Department of Agriculture, and it has almost nothing to do with farming.
The program is called the USDA Rural Development Guaranteed Loan, and it's been around for decades.
It's designed for low- and moderate-income households buying in areas the agency classifies as rural.
The catch, as with anything involving the federal government, is in the fine print.
First, "rural" is more generous than you'd think.
Roughly 97 percent of US land area qualifies, according to USDA eligibility maps.
That includes suburbs on the edge of metro areas, small towns within commuting distance of mid-size cities, and plenty of ZIP codes that don't feel rural at all.
You can check a specific address on the USDA's eligibility site in about two minutes.
Second, the income limits are the real gatekeeper.
They're set by county and household size, and they top out at 115 percent of the area median income.
In expensive metros, that ceiling can feel restrictive.
In cheaper markets, it's surprisingly roomy.
A family of four in a typical Midwest county might qualify earning well into six figures.
Third, and this is where skepticism is warranted, the program has quirks that can cost you.
USDA loans charge an upfront guarantee fee of 1 percent of the loan amount, and an annual fee of 0.35 percent baked into your payment.
That's cheaper than FHA mortgage insurance in most cases, but it's not free money.
The loan is also assumable, which is a genuine perk if rates stay high.
Here's the part the brochures gloss over: the seller has to agree to the deal, and USDA loans come with appraisal and property condition standards that can kill a purchase.
Sellers in hot markets sometimes steer buyers toward conventional offers because USDA closings can run slower.
You're not guaranteed a smooth process just because the government backs the loan.
There's also a persistent confusion problem.
The USDA's direct loan program, aimed at very low-income borrowers, has long waiting lists and stricter terms.
The guaranteed program is the one most buyers actually use, and it's administered through approved lenders, not the government directly.
If a lender tells you they "do USDA loans," ask whether they mean the guaranteed version and how many they closed last year.
One more thing worth flagging: rising rates have made every mortgage more expensive, and USDA loans are no exception.
A zero-down loan at today's rates can mean a larger balance and a bigger monthly payment than a buyer expects.
Run the numbers with a real lender before you fall in love with a house.
For the right buyer in the right ZIP code, this program is one of the few remaining paths to homeownership without a down payment.
For everyone else, it's a reminder that "government program" and "good deal" aren't automatically the same sentence.
Final Thoughts
Do the math, check the map, and ask who's actually making money on the loan.