Is it possible to buy a home with little or no money down? The answer is yes, but not the way most people think. There is no single loan program that automatically lets you skip paying anything at closing. What makes it possible is a specific strategy I use to combine down payment assistance with seller concessions, dramatically reducing what you need to bring to closing. In this article, I am going to show you three real transactions from my recent closings where buyers came out of pocket for next to nothing. One buyer actually got money back at closing. Here is exactly how the strategy works.
If you want to understand the realities of buying a home with no down payment before we dive into the examples, I cover the common questions on my Ask Patrick page.
Prefer to watch? Patrick walks through every closing disclosure in this video.
Important Clarification: It Is a Strategy, Not a Loan Program
I get calls all the time from people saying, "I like that loan program where you get your cash to close down below $1,000." Let me be clear: there is no such thing as a single "no money down" loan program that covers everything. What I use is a loan strategy combining two separate elements: down payment assistance (DPA) and seller concessions. These are not guarantees. They depend on the market, the seller's willingness, and your eligibility for available programs. But more often than not, if we follow a well-structured plan, we can bring that cash-to-close number way down.
Zero down payment is NOT the same as zero cash to close. Even with VA and USDA loans that require zero down payment, you still have closing costs, prepaids, and escrow funding. The strategy addresses all three buckets.
The Three Buckets of Closing Costs
Understanding why even a zero-down loan still costs money at closing comes down to three separate buckets of expenses that every buyer must fund. Here is how I explain it to my clients.
Bucket 1: Down Payment
The percentage of the purchase price you put down. 3.5% for FHA, 3% to 5% for conventional, 0% for VA and USDA. This is the bucket DPA programs help fill.
Bucket 2: Transaction Costs
Processing fees, underwriting fees, appraisal, inspection, survey, recording fees, title policy. These add up to thousands even on a zero-down loan.
Bucket 3: Prepaids and Escrows
Property taxes and homeowners insurance must be prepaid (insurance 12 months) and escrowed (2 to 3 months each). This is a real cost at closing.
The strategy works like this: DPA covers bucket 1 (the down payment), and seller concessions cover buckets 2 and 3 (transaction costs and prepaids). When both come together, you can end up with very little or nothing to pay at closing.
Understanding Your Zero-Down Loan Options
Before we look at real transaction examples, it helps to understand the loan programs that make zero-down buying possible. There are two main zero-down loan programs plus down payment assistance programs that work with any loan type. Here is what you need to know about each one.
VA Loan: Zero Down, No PMI, Available More Than Once
The VA loan is one of the most powerful home buying benefits available, yet many eligible borrowers never use it. Here are the key facts.
Down Payment
$0 (Zero Down)
Mortgage Insurance
None (No PMI)
Rates
Competitive
Eligibility
Veterans, Active Duty, Surviving Spouses
Who qualifies. VA loans are available to veterans, active-duty service members, National Guard and Reserve members, and eligible surviving spouses. If you served and received an honorable discharge, or if you are currently serving, you likely qualify.
You can use it more than once. A lot of veterans I talk to think they already used their VA loan benefit and it is gone. That is not how it works. You can reuse the benefit multiple times. As long as the previous VA loan is paid off or another buyer assumes it, your entitlement can be restored and you can use it again. I have worked with veterans who used their VA loan three or four times.
No PMI means lower payments. Unlike FHA loans that charge mortgage insurance for the life of the loan, VA loans have no monthly PMI. There is a one-time VA funding fee (which can be rolled into the loan), but you never pay ongoing mortgage insurance. That keeps your monthly payment lower than almost any other loan type.
The biggest problem I see. Many veterans do not know they are eligible. Or they assume they already used the benefit on a previous home and it is gone. I cannot tell you how many calls I take where a veteran tells me they did not think they qualified. In almost every case, they do. If you served, please look into this before assuming it is not available to you.
USDA Loan: Zero Down for Rural and Suburban Areas
The USDA loan is another zero-down option, and a lot of people misunderstand where it can be used. Let me clarify some of the most common misconceptions.
Down Payment
$0 (Zero Down)
Mortgage Insurance
None (No PMI)
Income Limits
Yes (Area-dependent)
Eligibility
Any qualified buyer
Not just for "middle of nowhere." When people hear "USDA" or "rural," they picture farmland hours away from the city. That is not accurate. The USDA eligible areas around San Antonio include large swaths of Bexar County, Comal County, Guadalupe County, and many suburban communities. Places like Bulverde, Spring Branch, parts of Schertz and Cibolo, and even some areas on the outskirts of San Antonio itself qualify. You do not have to live in the countryside.
Income limits apply. USDA loans have income caps that vary by area and household size. In and around San Antonio, the limits are high enough that many buyers with solid incomes still qualify. A quick conversation with a lender who knows the local limits can tell you in minutes whether you could qualify.
Not just for first-time buyers. Unlike some other assistance programs that require first-time homebuyer status, the USDA loan is available to anyone who meets the income requirements and buys in an eligible area. You can have owned a home before and still use USDA.
No PMI, lower monthly payment. Like VA loans, USDA loans do not require monthly mortgage insurance. There is an annual guarantee fee that is much smaller than typical PMI, but it still keeps your monthly payment lower than an FHA or conventional loan with PMI.
Quick note on DPA programs: Down payment assistance is available through Texas programs and can be layered on top of any loan type. The Texas State Affordable Housing Corporation offers up to 5% of the loan amount as a grant or deferred second lien, repaid only when you sell or refinance. The Texas Department of Housing and Community Affairs offers similar programs. I cover more detail on DPA further down in this article. The point is: even if you do not qualify for VA or USDA, combining an FHA or conventional loan with DPA and seller concessions can still get you close to zero cash-to-close.
Example 1: USDA Loan, $225,000 Home, Buyer Got Money Back
This first example closed in May of this year. The buyer used a USDA loan, which is a zero-down program for eligible rural and suburban areas. Because there was no bucket 1 (down payment), the challenge was covering buckets 2 and 3.
Purchase Price
$225,000
Loan Type
USDA (0% Down)
Closing Costs
$10,699
Cash to Close
-$2,200 (Got money back)
How It Worked
- Seller concessions: $5,731.67 directly plus $1,950.75 for the title policy and other items, roughly $7,800 total
- The USDA funding fee was rolled into the loan
- The buyer put down $2,200 in earnest money upfront and got it all back at closing
The closing cost number of $10,699 included $6,967.50 in actual transaction costs (bucket 2) plus $3,731.92 in prepaids and escrows (bucket 3). Even though the buyer had no down payment requirement (bucket 1), they still needed to cover buckets 2 and 3. By negotiating roughly $7,800 in seller concessions and rolling the USDA fee into the loan, the buyer walked out of closing with a check for $2,200: their earnest money refunded, plus some.
Example 2: FHA Loan, $198,000 Home, Buyer Got Money Back
Not everyone qualifies for a USDA loan (rural area requirement) or a VA loan (military service). This next example is for a buyer using an FHA loan with down payment assistance and seller concessions combined.
Purchase Price
$198,000
Loan Type
FHA (3.5% Down)
Closing Costs
$17,469
Cash to Close
-$73.99 (Got money back)
How It Worked
- DPA grant: $693 covering the down payment
- Seller credits: $9,500 negotiated by Patrick
- Total credits: roughly $10,193, enough to cover all three buckets
The buyer was looking at writing a check for over $17,000 at closing. Between the DPA grant that covered the down payment and the seller credits that covered transaction costs and prepaids, the buyer ended up getting a check for $73.99 back at closing. That is right: they closed on a $198,000 home and walked away with money in their pocket.
Example 3: FHA Loan, $312,000 Home, Only $5,141 at Closing
Here is the example that is most realistic for today's market. Not every area has $200,000 homes available. This buyer purchased a $312,000 home and paid just a fraction of what they would normally owe at closing.
Purchase Price
$312,000
Loan Type
FHA (3.5% Down)
Closing Costs (Unassisted)
$29,288
Cash to Close (After Strategy)
$5,141.89
How It Worked
- DPA grant: $1,937 covering most of the down payment
- Seller credits: $6,955 negotiated by Patrick
- Combined credits: roughly $8,892 bringing cash-to-close from ~$22,600 down to $5,141.89
Without any strategy at all, this buyer would have needed nearly $30,000 at closing. Through DPA covering roughly $1,937 of the down payment and seller credits covering $6,955 of the transaction costs and prepaids, the buyer wrote a check for just over $5,100 at closing. That is a difference of more than $24,000 in cash the buyer did not have to bring to the table.
How the Strategy Works: DPA + Seller Concessions
Here is the core of what makes these examples work. It is a combination, not a single product.
Down Payment Assistance (DPA)
DPA programs provide grant money or forgivable loans to cover some or all of your down payment. In Texas, programs through TDHCA (My First Texas Home, My Choice Texas Home), TSAHC (Homes for Texas Heroes, Home Sweet Texas Home), and local programs in San Antonio and Bexar County offer up to 5% of the purchase price as assistance. Eligibility depends on income limits, credit score (typically 620+), and completion of a homebuyer education course.
Current Texas DPA programs (2026): My First Texas Home offers up to 5% as a deferred second lien (0% interest, no monthly payment, due when you sell or refinance). My Choice Texas Home has the same structure but no first-time buyer requirement. Homes for Texas Heroes provides up to 5% as a grant or forgivable second lien for teachers, first responders, and veterans. Availability and terms change, so current verification is essential.
Seller Concessions
Seller concessions are amounts the seller agrees to pay toward your closing costs. They are negotiated as part of your offer and must stay within limits set by each loan program. The seller can cover things like loan origination fees, discount points, appraisal fees, title fees, and prepaid items.
FHA
Up to 6% of purchase price
VA
Up to 4% of purchase price
USDA
Up to 6% of purchase price
Conventional loan concessions vary by loan-to-value ratio and down payment size. A lender can confirm the exact limits for your situation.
Important Disclaimers
These examples are examples, not guarantees. Every transaction is different. What worked for these buyers may not work for you depending on the market, the property, and your specific financial situation.
Seller concessions are market-dependent. In a hot seller's market with multiple offers, a seller may have no reason to offer concessions. The strategy works best when you have room to negotiate.
DPA programs have eligibility requirements. Income limits, credit score minimums, first-time buyer status, and location restrictions all apply. Current program availability must be verified at the time of application.
Zero down is not the same as zero cash to close. VA and USDA loans require zero down payment, but you still need to cover closing costs, prepaid taxes, and insurance. Even with this strategy, I cannot promise any buyer will close with $0 out of pocket.
Patrick's Take: Why Experience Matters
I made a video about this strategy about nine months ago and it became my most popular one. But I got a lot of comments saying it was not possible. So I am here to tell you with proof today. These are real closing disclosures from real transactions I handled. You say that is not possible, and I just showed you three times that it is.
I have been doing this for over 23 years in loan origination and 18 years in real estate sales. Being dual-licensed means I can look at a buyer's financial picture and know immediately which DPA programs they might qualify for, what seller concessions a particular loan program allows, and how to structure the offer so both elements work together. I cannot always guarantee this result. It depends on the market, the seller, and the programs available at the time. But I can tell you honestly whether the strategy has a realistic chance of working for your situation.
My philosophy is simple: I believe a family's home is ultimately the biggest wealth building asset a person or family can create. My goal is to assist families in starting the path towards homeownership and be a part of their wealth building and independence journey. If I can help you get there with less of your own cash tied up at closing, that is a win.
Frequently Asked Questions
What is the difference between "no money down" and "zero cash to close"?
Can I really buy a house with no money down in 2026?
What down payment assistance is available in Texas?
Can seller concessions always cover my closing costs?
Is this a specific loan program I can apply for?
How much do I need to save before I start looking?
Continue Your Education
Explore more resources from Patrick to deepen your home buying knowledge.
The Complete First-Time Home Buyer's Roadmap
From pre-approval to closing, step by step
USDA Loans Explained: Zero Down, But Are You Eligible?
Income limits, geography, and requirements
VA Home Buying Guide for Military Families
Zero down, seller concessions, and more
The Fixer-Upper Home Hack: Renovation Loans
Buy and repair with one loan
Want to See If This Strategy Could Work for You?
Every buyer's situation is different. I am happy to have a short conversation, look at your numbers, and tell you honestly whether this strategy has a realistic chance of working in your market and price range. No obligation, no pressure, just a straightforward conversation.
Patrick Kevin Fagan
Loan Officer and Realtor · AXEN Realty LLC · San Antonio and Texas Hill Country
Licensed Sales Agent · 454749 · TX
Sincerely, Patrick Kevin Fagan