Loans that need little or nothing down
- VA. Down payment rule: No down payment with full entitlement, as long as the price isn't above the appraised value (VA purchase loans). Who it fits: Eligible veterans, service members and some surviving spouses.
- USDA. Down payment rule: 100% financing (USDA guaranteed loan program). Who it fits: Moderate-income buyers in eligible areas, including some edges of DFW. See USDA loans.
- FHA. Down payment rule: Minimum investment of 3.5% of the price or value (HUD 4000.1 II.A.2.a). Who it fits: Buyers with a 580 score or higher (our minimum), often with gifts or assistance.
- Conventional (HomeReady and similar). Down payment rule: As little as 3% on some programs; HomeReady has an income limit of 80% of area median income (Fannie Mae B5-6-01). Who it fits: Buyers with stronger credit. See HomeReady vs Home Possible.
Ways to cover the down payment and closing costs
- Gift funds. Family members and certain others can give you money for the down payment on most loan types, with a signed gift letter and a paper trail. See gift funds.
- Seller help. The seller can pay some of your closing costs. FHA allows up to 6% of the sales price (HUD 4000.1 II.A.4.d.iii). Fannie Mae allows 3% to 9% depending on your down payment (Fannie Mae B3-4.1-02). Seller help can't be used for the down payment itself on those programs. See seller concessions.
- Texas down payment assistance. TSAHC and TDHCA offer assistance of up to 5% of the loan amount as grants or forgivable or repayable second liens, and we can offer them where the programs' current guidelines allow. They have income, price and credit limits, usually starting at a 620 score, and depend on current program funding. TDHCA doesn't allow cash back at closing. See TSAHC and TDHCA.
The cash you'll still likely need in Texas
Even with a zero-down loan, plan for money that's due before closing:
- Earnest money and the option fee. These are upfront transaction expenses, usually due soon after your contract is signed. When they're due, whether they're credited toward your purchase at closing, and whether either could be refunded all depend on your signed contract. Your agent can walk you through yours.
- Home inspection, paid when it's done.
- Appraisal, often paid upfront to the lender.
- Reserves, if your program or file needs savings left over after closing.
How much each one costs varies, and your agent and lender can give you real numbers for your deal. Some of these may be covered later by seller credits, but you usually have to pay them first.
What this means by layer
The agency sets the minimum down payment, and we follow the agency minimums. Some lenders add their own requirements. Assistance programs add income, price and credit rules. And underwriting still approves your income, credit and the source of every dollar you bring.
Fictional example
This example is made up to show the pieces.
Sam is a Navy veteran buying in Saginaw with a VA loan and no down payment. He still put down earnest money and an option fee within days of signing the contract, paid for the inspection, and paid for the appraisal. The seller agreed to cover most of his closing costs, and his earnest money was credited at closing, as his contract provided. His loan still had to be approved by underwriting.
What to do next
- Find out which loan types you're eligible for before you set your budget.
- Set aside cash for the early costs: earnest money, option fee, inspection and appraisal.
- If a family member may help, have them talk with your lender about how to document the gift.
Next step
Short on savings? Let me show you the smallest real cash number for your situation. Book a call
Related questions
Sources
Links checked Oct 19, 2026.
About the author: McKade Lively, NMLS 2704474, American Pacific Mortgage Corporation dba True North Home Loans, NMLS 1850.
Equal Housing Opportunity.
Last reviewed: Oct 2026