Yes — but the answer has a distinction almost no guide explains, and that distinction changes everything.
"No money down" means the down payment percentage is zero. It does not mean you walk to the closing table with nothing in your bank account. VA loans require $0 down — and still have closing costs of $10,000–$14,000 plus reserve requirements. FHA loans combined with Colorado's CHFA down payment assistance eliminate the down payment — and still have closing costs the buyer typically covers. USDA loans require $0 down — and still need closing costs and reserves unless the seller covers them.
Understanding the difference between zero down payment and zero cash at closing is the most important thing in this article. Most buyers confuse them, get disappointed when they discover the closing cost requirement, and either give up or end up in a financially fragile position because they didn't budget correctly.
This guide is honest about what each zero-down path actually costs in practice, what you realistically need to have in your bank account on closing day, and when the full near-zero closing scenario is actually achievable.
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Quick answer for Colorado buyers: VA ($0 down, veterans only), USDA ($0 down, rural Colorado, income limits), and FHA + CHFA DPA ($0 effective down, 620+ credit, income limits) are the three legitimate zero-down-payment paths. Total cash at closing depends on closing costs, reserves, and seller concessions. A well-structured deal can get to near-zero — but requires planning, not luck. |
These are two different numbers. Conflating them is why buyers get surprised at the closing table.
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$0 DOWN PAYMENT |
$0 CASH AT CLOSING |
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What it means: The percentage of the purchase price you contribute upfront toward the home itself. VA loans: $0 down payment. USDA loans: $0 down payment. FHA + CHFA DPA: $0 effective down payment. These are real programs where the down payment contribution required from the buyer is zero. What it does NOT mean: $0 closing costs, $0 reserves, $0 total cash needed on closing day. |
What it means: Walking to the closing table with literally no money required from you — after accounting for all closing costs, reserves, and fees. When it can happen: When seller concessions cover closing costs AND gift funds or DPA cover the down payment AND the lender rolls any insurance fees into the loan. All three must align simultaneously. How common this is: Rare in practice. Most 'no money down' closings still require $8,000–$20,000 in the buyer's account for closing costs and reserves. |
The practical implication: even the best zero-down programs leave the buyer responsible for closing costs (typically 2%–4% of purchase price) and reserves (typically 2–3 months of housing payments). On a $400,000 Colorado purchase, that is $8,000–$16,000 in closing costs plus $7,800 in reserves — even when the down payment itself is zero.
The gap can be closed through seller concessions (the seller pays buyer's closing costs), gift funds (documented family contributions), or in some VA scenarios, rolling the funding fee into the loan and negotiating seller coverage of closing costs entirely. But these require pre-planning, a motivated seller, and a properly structured offer — not just a favorable loan program.
This is the table most guides don't show you. For each zero-down or near-zero-down path, here is what you realistically need in your bank account on closing day — before and after seller concessions.
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Path |
Down Payment Required |
Insurance / Fee |
Other Cash Needed |
Realistic Total Cash Day of Closing |
|---|---|---|---|---|
|
VA Loan ($400K purchase) |
$0 |
Funding fee: 2.15% = $8,600 (can roll into loan)No PMI |
Closing costs: ~$10,000–$14,000Reserves: ~$7,800 |
$17,800–$21,800 without concessions$7,800–$11,800 with 3% seller concessions~$0 if seller pays all closing costs |
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USDA Loan ($300K rural) |
$0 |
Guarantee fee: 1% = $3,000 (rolls in)0.35% annual |
Closing costs: ~$7,500–$10,500Reserves: ~$5,850 |
$13,350–$16,350 without concessions$3,000–$6,000 with seller concessions |
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FHA + CHFA DPA ($400K) |
$0 (DPA covers 3.5%) |
FHA MIP: 1.75% upfront (rolls in)0.55% annual |
Closing costs: ~$10,000–$14,000Reserves: ~$7,800 |
$17,800–$21,800 without concessions$7,800 if seller pays closing costs~$0 with concessions + gift for reserves |
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FHA only ($400K) |
$14,000 (3.5%) |
FHA MIP: 1.75% upfront (rolls in)0.55% annual |
Closing costs: ~$10,000–$14,000Reserves: ~$7,800 |
$31,800–$35,800 totalNot a zero-down path |
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Seller Financing (negotiated) |
5%–15% negotiated |
None (no lender PMI) |
Closing costs: ~$5,000–$8,000 (lower without bank)Reserves: negotiated |
$25,000–$68,000+ depending on termsCan be lower if seller is motivated; attorney required |
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Key takeaway from this table: The 'no money down' paths that get closest to truly zero cash at closing are VA + full seller concessions (for eligible veterans) and FHA + CHFA DPA + seller concessions + gift funds (for qualifying first-time buyers). Both require all components to align. Most buyers end up needing $7,800–$15,000 even on the best zero-down programs — which is still far less than the $34,000–$50,000 required for a conventional purchase without assistance. |
For eligible veterans, active-duty service members, and qualifying surviving spouses, the VA home loan benefit is the best zero-down program in the market. No down payment, no private mortgage insurance, and competitive rates. If you have VA eligibility, the financial case for using it is almost always compelling.
VA loans carry a one-time VA funding fee — not PMI, but a fee charged by the VA to sustain the loan program. For a first-time VA buyer with 0% down, the funding fee is 2.15% of the loan amount. On a $400,000 purchase, that is $8,600. The funding fee can be rolled into the loan balance — meaning you do not need to pay it at closing. Veterans with service-connected disabilities are exempt from the funding fee entirely.
Rolling the fee into the loan means borrowing $408,600 instead of $400,000. The monthly payment difference is approximately $54/month. Most buyers elect to roll it in rather than pay it out of pocket.
A VA loan is assumable — a future buyer (even a non-veteran) can take over your mortgage at your original interest rate when you sell. In a market where rates are elevated, this is a meaningful future selling advantage that increases the value of the home beyond its appraised price.
The USDA Rural Development single-family housing program provides 100% financing — zero down payment — for buyers purchasing in USDA-eligible areas. Colorado has extensive USDA-eligible geography: parts of Larimer, El Paso, Pueblo, Fremont, Mesa, and most rural counties qualify. Even some areas within commuting distance of Fort Collins, Colorado Springs, and Pueblo are eligible. The USDA maintains an online address eligibility tool — check specific properties at the USDA website before assuming eligibility or ineligibility.
USDA charges a 1% upfront guarantee fee (typically rolled into the loan) and a 0.35% annual fee — lower than FHA's MIP structure. Unlike FHA MIP, USDA's annual fee can be removed when loan-to-value ratio falls below 80% (check current USDA guidelines as policies may change).
For Colorado buyers who don't have VA eligibility and aren't purchasing in a rural USDA area, combining an FHA loan with Colorado's CHFA down payment assistance produces an effective $0 down payment. CHFA provides 3%–4% of the first mortgage amount as a deferred 0% second mortgage — enough to cover FHA's 3.5% minimum down payment.
MetroDPA also serves Denver-area buyers. Verify current program terms directly at metrodpa.org.
The distance between a 619 score (FHA-eligible) and a 620 score (CHFA DPA-eligible) can mean the difference between needing $14,000 for a down payment and needing $0. A 619 to 620 improvement is achievable in 30–60 days with targeted utilization reduction. If your score is 615–619, evaluate this path before assuming DPA is unavailable.
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Path |
Who Qualifies |
Min Credit Score |
Income Limit |
Property Restriction |
|---|---|---|---|---|
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VA Loan |
Veterans, active-duty service, qualifying surviving spouses |
No official minimum (580+ most lenders) |
No income limit |
Any eligible property; seller's primary residence not required |
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USDA Loan |
Any buyer meeting income/area requirements |
No official minimum (580–620+ most lenders) |
At or below 115% area median income |
USDA-eligible rural/suburban address only — check USDA map |
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FHA + CHFA DPA |
First-time buyers (not owned 3 yrs); some exceptions for HomeAccess, targeted census tracts |
620+ (CHFA firm minimum) |
Within Colorado county AMI limits |
Colorado purchase only; primary residence; must use CHFA-approved lender |
Down payment assistance covers the down payment. Seller concessions cover closing costs. Gift funds cover reserves. When all three are in place simultaneously, a buyer can reach near-zero cash at closing. Here is what that looks like for each zero-down path.
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Stack |
Who It Works For |
How the Cash Buckets Are Covered |
Realistic Buyer Cash at Closing |
|---|---|---|---|
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VA + Seller Concessions |
VA eligible buyer; seller agrees to 3%–4% concession toward buyer's closing costs |
Down payment: $0Funding fee: rolled into loanClosing costs: seller pays $10,000–$12,000Reserves: buyer provides (~$7,800–$9,000) |
~$7,800–$9,000 buyer cash at closing — just reserves. Closest to truly zero for eligible veterans. |
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USDA + Seller Concessions |
USDA-eligible address; seller concessions cover closing costs |
Down payment: $0Guarantee fee: rolled inClosing costs: seller pays $8,000–$10,000Reserves: buyer provides (~$5,850) |
~$5,850 buyer cash — just reserves. Works best when seller is motivated. |
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FHA + CHFA DPA + Seller Concessions |
620+ credit, income within limits; seller agrees to 3%–6% concession |
Down payment: $0 (CHFA covers)FHA MIP: rolled inClosing costs: seller paysReserves: buyer provides (~$7,800) |
~$7,800 buyer cash — just reserves. The most accessible zero-down-payment path for non-veterans in Colorado. |
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FHA + CHFA DPA + Seller Concessions + Gift Funds |
Same as above + documented gift from family member to cover reserves |
Down payment: $0Closing costs: seller paysReserves: gift funds cover |
~$0 required from buyer's own funds. All three must align. Requires pre-planning and proper documentation. |
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“Near-zero cash at closing is possible — but it requires all three components to align: a zero-down loan, a seller willing to negotiate concessions, and either gift funds or a DPA program covering reserves. Pre-plan each piece before you search for a home.” |
Seller financing is not a zero-down program. But it is a path where the down payment is negotiated directly with the seller — and a highly motivated seller may accept less than any conventional program requires.
A seller financing arrangement typically requires 5%–15% down as a negotiated starting point. The seller evaluates the buyer directly without bank underwriting minimums. For buyers who don't meet VA, USDA, or CHFA eligibility but have a motivated seller willing to structure a flexible deal, seller financing can produce a lower upfront requirement than most conventional paths.
The tradeoff: higher interest rate (typically 6%–10%), a balloon payment due in 3–7 years requiring a refinance, and the absolute requirement for a licensed Colorado real estate attorney to draft all documents. A seller financing deal without proper legal documentation is genuinely dangerous for the buyer.
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Seller financing is not a shortcut. It is a legitimate path with legitimate protections required. Title search, owner's title insurance, deed recorded in buyer's name at closing, attorney-drafted promissory note and deed of trust — these are not optional. Every seller financing deal requires them. |
Zero-down programs are real, legitimate, and appropriate for many buyers. They also carry specific financial risks that buyers should understand before using them.
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Risk |
What It Means in Practice |
How to Manage It |
|---|---|---|
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No equity buffer on day one |
A $0-down buyer owns 100% financed by debt. If home values drop even 3%–5% in the first two years, the buyer is underwater — owing more than the home is worth. Selling becomes very difficult. |
Only buy zero-down when you plan to stay 5+ years. If there's a possibility of a shorter timeline, build more equity before buying. |
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Higher monthly payment |
0% down = maximum loan balance = maximum monthly payment. On a $400,000 home, 0% down at 6.53% produces a $2,532 P+I vs. $2,407 at 5% down and $1,893 at 20% down. |
Run the full monthly budget with taxes, insurance, PMI, HOA, and maintenance at the maximum loan balance before committing. The monthly number must be sustainable independently of any future income increase. |
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Mortgage insurance that may last years |
FHA MIP stays for the loan's life at low down payments (without a refinance). VA has no PMI but charges a funding fee. USDA has an annual fee of 0.35%. |
Factor lifetime insurance cost into your comparison. For FHA, plan the refinance strategy: when you expect to reach 20% equity and what it will cost to refinance into a conventional loan. |
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Depleted reserves at closing |
Even with $0 down, closing costs and reserves still need to come from somewhere. Buyers who stretch every dollar to close are one repair away from financial crisis. |
Maintain 3+ months of housing expenses in liquid savings after all closing costs are paid. If that is not possible at your current savings level, delay or find a seller concession arrangement that preserves the reserve. |
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Seller perception in competitive offers |
In competitive situations, a zero-down offer can be perceived as weaker than a financed offer with equity — because sellers assume a zero-down buyer is more likely to have a financing problem. |
A strong pre-approval letter from a lender experienced with your program type addresses this. Being fully prepared (education complete, lender in place, documents ready) matters more than the down payment size. |
These risks don't mean zero-down is the wrong choice. They mean it's a choice that requires honest planning — staying long enough for equity to build, maintaining adequate reserves, and not stretching to a monthly payment that leaves no margin.
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“Zero down payment is not proof you aren't ready. And zero down payment is not a guarantee you are. The readiness test is the monthly budget, the reserve plan, and the timeline — not the program.” |
Precise answers to the questions buyers ask most about zero-down homebuying.
Can I buy a house with no money down and no closing costs?
In specific scenarios — yes. VA loans with full seller concessions can cover closing costs, leaving the buyer responsible only for reserves. FHA + CHFA DPA + seller concessions + gift funds for reserves can produce near-zero buyer cash at closing. But these scenarios require all components to align simultaneously: zero-down loan eligibility, a seller willing to pay 3%–6% concessions, and gift funds or additional DPA covering reserves. Most 'no money down' buyers still need $7,800–$15,000 for closing costs and reserves. The CFPB's closing cost guide explains what each closing cost line item covers.
Does VA loan really require no money down?
Yes — the VA home loan benefit requires no down payment for eligible veterans, active-duty service members, and qualifying surviving spouses. There is no VA-set credit score minimum, though most lenders require 580+. The VA funding fee (2.15% for first-time use, 0% down) is the primary cost and can be rolled into the loan balance, requiring no out-of-pocket payment. Closing costs and reserves remain the buyer's responsibility unless the seller agrees to cover them.
Does USDA loan really require no money down?
Yes — the USDA Rural Development program provides 100% financing for eligible properties in USDA-eligible areas. The buyer must have income at or below 115% of area median income. The USDA guarantee fee (1% upfront, 0.35% annual) is charged but can be rolled into the loan. Closing costs and reserves still apply. Use the USDA's address eligibility tool to confirm whether a specific Colorado property qualifies — many semi-rural and small-town Colorado addresses are eligible.
What is CHFA DPA and how does it eliminate the down payment?
CHFA (Colorado Housing Finance Authority) offers down payment assistance as a deferred 0% second mortgage for eligible first-time buyers in Colorado. The assistance covers 3%–4% of the first mortgage — enough to meet FHA's 3.5% down payment requirement. The second mortgage has no monthly payment and is repaid when you sell, refinance, or pay off the first mortgage. Eligibility requires 620+ credit, income within county AMI limits, and first-time buyer status (not owned primary residence in 3 years). Full details at chfainfo.com.
What are seller concessions and how do they help with closing costs?
Seller concessions are credits the seller provides toward your closing costs — reducing the cash you need at closing. FHA allows up to 6% seller concessions; VA allows up to 4% toward concessions and up to the full closing cost amount. On a $400,000 purchase, a 3% seller concession = $12,000 toward your closing costs. Combined with a zero-down-payment program, this can bring total buyer cash at closing down to reserves only (~$7,800–$9,000). The CFPB explains seller concessions and how they are documented in the purchase agreement.
Can I buy in Denver with no money down?
Denver's median price of ~$610,000 is above most zero-down program limits for non-VA loans. VA has no loan limit for eligible buyers with full entitlement. USDA eligibility generally excludes Denver metro core areas. CHFA DPA works for first-time buyers within income limits at purchase prices within CHFA loan limits — verify current limits at chfainfo.com. In outer Denver neighborhoods (Westwood, Montbello, Green Valley Ranch) and adjacent markets (Aurora, Thornton, Westminster), prices in the $350,000–$450,000 range make DPA-assisted zero-down purchases more accessible than at Denver's median price.
What happens if I buy with zero down and home prices drop?
If you purchase with $0 down and home values decline — even modestly — you may find yourself underwater: owing more than the home is worth. On a $400,000 purchase with zero equity, a 5% decline means the home is worth $380,000 while you owe $400,000+. Selling would require you to bring cash to the table or negotiate a short sale with the lender. This risk is most significant in the first 1–3 years of ownership before meaningful equity builds through principal paydown and any appreciation. Zero-down is most appropriate for buyers who plan to stay 5+ years — long enough for equity to build a meaningful buffer.
Can I get a no money down home loan with bad credit?
VA and USDA loans have no official credit minimum, though most lenders require 580+. CHFA DPA requires 620+. Below 580, the conventional zero-down paths are largely closed, but seller financing has no credit floor — the seller evaluates the buyer directly without bank underwriting minimums. Below-580 buyers can negotiate a down payment directly with a motivated seller, which may be lower than what's available through conventional programs. See Can You Buy With Bad Credit? for the full breakdown by credit range.
All program details from official administering sources. Requirements and eligibility change — verify current information before acting.
1. U.S. Department of Veterans Affairs — VA Home Loan Benefit
2. USDA Rural Development — Single Family Housing Programs
3. U.S. Department of Housing and Urban Development — FHA Loan Requirements
4. Colorado Housing Finance Authority (CHFA) — Down Payment Assistance
5. CHFA — Homeownership Programs Overview
6. MetroDPA — Denver Metro Down Payment Assistance
7. Consumer Financial Protection Bureau — Owning a Home Resources
8. HUD — Find a HUD-Approved Housing Counselor
9. Annual Credit Report — Free Federal Reports
10. Redfin — Denver Housing Market Data
11. Freddie Mac — Primary Mortgage Market Survey
Disclosure: Educational content only. Not legal, financial, or mortgage advice. Program requirements, income limits, and loan limits change — verify all details with CHFA, the VA, USDA, or a licensed mortgage professional before making any decision.