Does a HELOC replace my mortgage?

No — that's the main difference from a cash-out refinance. A HELOC sits behind your existing mortgage as a second lien, so your original loan stays exactly as it is.

Can I borrow again after paying down a HELOC?

Yes, during the draw period — that revolving flexibility is the defining feature. After the draw period ends, the line enters repayment and you pay the balance down.

HELOC or cash-out refinance — which is better?

It depends on your current mortgage, how much you need, and whether the need is ongoing. If you want to keep your mortgage and value flexibility, a HELOC often fits; for a single lump sum, a cash-out refinance may be better.

No Down Payment Mortgage Options

Zero-down programs exist

While most mortgages require some down payment, a few programs allow eligible buyers to purchase with no down payment. The best-known are government-backed: VA loans for eligible veterans, active-duty service members, and certain others, and USDA loans for eligible buyers in qualifying rural and some suburban areas. These programs make homeownership possible without the hurdle of saving a large down payment.

VA and USDA basics

VA loans, guaranteed by the Department of Veterans Affairs, offer eligible borrowers the ability to buy with no down payment and without private mortgage insurance, though other requirements and a funding fee may apply. USDA loans, backed by the Department of Agriculture, allow eligible buyers in qualifying areas to buy with no down payment, subject to income and location eligibility. Each has specific rules about who and what qualifies.

What to consider

Buying with no down payment means financing the full purchase price, so your loan balance and monthly payment are higher, and you start with little equity. You’ll still need funds for closing costs and reserves in most cases, though these can sometimes be addressed through seller contributions or other means. Understanding the full cost, not just the absence of a down payment, is important.

Checking your eligibility

Because zero-down programs have specific eligibility requirements, the key question is whether you qualify. Veterans and service members should explore VA benefits; buyers in eligible areas should look at USDA. A licensed loan originator can confirm your eligibility and explain how these programs would work for your situation, including the costs beyond the down payment.

MortgageQuote.com is a private company and is not affiliated with, or acting on behalf of, or at the direction of the FHA, VA, USDA, Fannie Mae, Freddie Mac, or any government agency. Program names are referenced for educational purposes only.

This article is for general educational purposes and is not financial, legal, or tax advice, nor a commitment to lend or an offer of any specific rate or term. Consult a licensed professional about your situation. MortgageQuote.com · NMLS #1967971. Equal Housing Opportunity.

Frequently asked questions

Can I buy a home with no down payment?

For eligible buyers, yes. VA loans (for eligible veterans and service members) and USDA loans (for eligible buyers in qualifying areas) may allow purchasing with no down payment.

What is a VA loan?

A mortgage guaranteed by the Department of Veterans Affairs that offers eligible borrowers no down payment and no private mortgage insurance, though a funding fee and other requirements may apply.

What is a USDA loan?

A mortgage backed by the Department of Agriculture allowing eligible buyers in qualifying rural and some suburban areas to buy with no down payment, subject to income and location eligibility.

Do I still need any money to buy with zero down?

Usually yes, for closing costs and often reserves, though these can sometimes be addressed through seller contributions or other means. Understand the full cost beyond the down payment.

Are there truly no-down-payment mortgages?

Certain programs — notably VA and USDA loans for eligible borrowers — allow qualified buyers to purchase with no down payment. Eligibility depends on the program, and a broker can help you see if you qualify.

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