On a $400,000 Richmond-area purchase (an illustrative price; check the current city-wide median from Virginia REALTORS or Zillow city-level data), a 5% down payment is $20,000 in cash. A VA loan can require $0 down on the same house. Zero down payment mortgage programs exist, but they are narrow. In 2026 only VA and USDA loans offer 100% financing, and each has strict eligibility rules. The right strategy depends on your military status, your credit, and the property itself.
Zero down also does not mean zero cash. Closing costs, prepaid taxes and insurance, and earnest money still exist. The seven strategies below work as a decision path, from the strongest option to the fallbacks. Written by Duane Buziak, NMLS #1110647. Figures are current as of 2026 and can change.
Table of Contents
- Start With the VA Purchase Loan if You Have Entitlement
- Use Remaining or Restored Entitlement to Buy Again
- Pair a Zero-Down VA Offer With a Seller Concession Plan
- Know the Limits of USDA Zero-Down Loans
- Step Down to Low-Down Options
- Cover Cash Needs With Gift Funds and Assistance
- Get Pre-Approved Early With a Soft Pull
- Where to Start: A Ranked Order for Zero-Down Decisions
- Worked Dollar Example
- Program Comparison Table
- Frequently Asked Questions
1. Start With the VA Purchase Loan if You Have Entitlement
A VA loan works without a down payment because the Department of Veterans Affairs guarantees part of the loan, which replaces the cushion a down payment would give the lender. That guarantee is your entitlement, and the proof of it is your Certificate of Eligibility (COE). With full entitlement there is no VA-imposed loan limit, and there is no monthly mortgage insurance. The main added cost is the funding fee, a one-time charge that can be financed into the loan.
Illustration: a veteran with a COE buys a $400,000 Richmond-area home with $0 down. As of 2026, the first-use funding fee at zero down is 2.15% of the loan, or $8,600. Financing it makes the loan $408,600. A conventional buyer with 3% down would be paying monthly PMI that this veteran never pays. Confirm the current fee table on va.gov.
- Request your COE through va.gov or have your lender pull it.
- Check whether you are exempt from the funding fee. Veterans receiving VA disability compensation, Purple Heart recipients, and certain surviving spouses generally are.
- Get pre-approved before touring homes.
- Work with an agent and an appraisal process experienced with VA requirements, since the home must meet VA minimum property standards.
Common mistake: assuming the funding fee has to be paid in cash, or never checking for an exemption. A disability rating can erase a charge of several thousand dollars.
What to measure: cash needed at closing and the total monthly payment, compared against a 3% conventional scenario using the same price and rate assumptions.
2. Use Remaining or Restored Entitlement to Buy Again With No Down Payment
The most common error here is believing entitlement is gone after the first VA loan. It usually is not. Entitlement can be restored, for example when the prior loan is paid off and the home sold, and a one-time restoration is available in some cases when you keep the property. Even when it is not restored, you may have remaining entitlement available alongside the old loan.
Illustration: a veteran keeps a first home as a rental and uses remaining entitlement to buy a new primary residence. The lender takes 25% of the county loan limit and subtracts the entitlement already in use. That figure sets the maximum loan with $0 down. Above it, the veteran would need a down payment on the difference. In most Virginia counties the 2026 baseline limit of $832,750 (published by FHFA) drives that math, but the lender confirms the exact county figure.
Steps to put it into practice:
- Pull a COE that shows entitlement used and the properties tied to it.
- Ask which restoration options apply to your situation.
- Have the lender calculate the maximum no-down loan amount before you set a price range.
- If the target price exceeds that maximum, ask what down payment would cover the gap.
What to measure: the maximum loan amount with $0 down under your remaining entitlement. Compare it with your target price. If the gap is small, a modest down payment on only the excess is usually far cheaper than abandoning the VA route.
3. Pair a Zero-Down VA Offer With a Seller Concession Plan
Consider a $400,000 offer where the funding fee is financed and the seller pays allowable costs. Suppose closing costs run $10,000 and prepaid taxes and insurance run $4,000. Without concessions, cash to close is about $14,000. If the seller covers the $10,000 in costs, cash to close drops to roughly $4,000. These are illustrative figures, but they show why concessions matter for buyers with little savings.
The mechanism is simple: instead of you paying costs out of pocket, the seller credits them at closing. VA rules cap certain seller concessions at 4% of the home’s value, and the lender determines which items count toward that cap and which, like typical closing costs, do not. Check the current rules at va.gov.
- Ask the lender which concessions are allowable on your loan.
- Write the concession amount into the offer in dollars or as a percentage.
- Compare the offer’s net effect on the seller’s proceeds, since a $10,000 credit is $10,000 less in their pocket.
- Make sure the price still appraises.
Common mistake: asking for more than VA allows, or over-asking in a competitive market and losing the contract. A clean offer with a modest credit often beats an aggressive one.
What to measure: estimated cash to close with and without concessions, written side by side on your loan estimate.
4. Know the Limits of USDA Zero-Down Loans Before Counting on Them
Illustration: a buyer finds a home they love, checks the address on USDA’s property eligibility map, and learns it is ineligible. They have spent ten minutes instead of paying for an inspection and appraisal on a deal that could never close.
USDA loans offer 100% financing, but only for properties in designated rural areas and only for households within income limits. Those limits are tied to household size and local area income. City-proper Richmond rarely qualifies, so USDA is a realistic option mainly for homes in more outlying locations. For many Richmond buyers it will be a dead end, and that is useful to learn early.
How to use this strategy:
- Enter the property address into the USDA eligibility map before writing an offer.
- Check your household income against the current limit for your household size.
- Confirm any property-specific requirements with the lender.
- If either test fails, move straight to the next strategy.
Common mistake: assuming eligibility from the general area rather than checking the exact address. Eligibility lines can split neighboring streets.
What to measure: two simple results, property eligibility (yes or no) and income limit (pass or fail). Both must pass. USDA is not a substitute for VA, and it should never be the plan a contract depends on until it is verified.
5. Step Down to Low-Down Options When Zero Down Isn’t Available
The math on $400,000: Conventional 3% down is $12,000, and FHA 3.5% down is $14,000. The FHA minimum of 3.5% requires a 580 FICO score under HUD guidelines. Lower scores generally need 10% down. Conventional 3% programs usually need stronger credit and may carry income limits.
The down payment is only part of the cost. FHA charges an upfront mortgage insurance premium plus annual premiums, while conventional PMI depends heavily on credit score and can be removed once equity reaches 20%. A buyer with a high score can see a conventional payment well below FHA. A buyer with a lower score may see the opposite.
- Request quotes for FHA, Conventional 3%, and VA if you are eligible, all on the same price.
- Put the three monthly payments and the three cash-to-close figures side by side. This is the Dare to Compare challenge: bring any competing quote and test it against these numbers.
- Project the mortgage insurance cost over five and ten years.
Common mistake: comparing only the down payment and ignoring mortgage insurance over time. A $2,000 saving at closing can be erased by a higher monthly insurance cost within a few years.
What to measure: total monthly payment and cash to close for each program. The section below on the worked dollar example shows these numbers in full.
6. Cover Cash Needs With Gift Funds and Down Payment Assistance, Without Double-Stacking
Low-down loans still need cash, and many first-time buyers cover it with a family gift or an eligible Virginia assistance program. The mechanism is documentation: lenders must verify that gift money is truly a gift, not a loan, and that it came from an acceptable source.
Illustration: a first-time buyer uses a documented family gift to cover the $14,000 down payment on a $400,000 FHA purchase. Because the donor provided a signed letter and the transfer is traceable in bank statements, the funds are accepted without delay.
- Have the donor sign a gift letter stating the amount, the relationship, and that no repayment is expected.
- Transfer the funds in a way that leaves a clear paper trail, and keep both account statements.
- Before signing a contract, confirm whether any assistance program you want, such as those offered through Virginia Housing, fits your income, price, and loan type.
- Give the lender everything early, so documentation does not become a closing-week problem.
Common mistake: moving gift money in cash or through several accounts without a record, or assuming multiple grants can be combined on one purchase. Plan around one assistance program at a time and confirm its rules before you count on it.
What to measure: the percentage of your required cash (down payment plus closing costs plus reserves) covered by documented sources. Anything under 100% is a gap to close before you make an offer.
7. Get Pre-Approved Early With a Soft Pull to Match the Right Program
A soft pull reviews your credit without a hard inquiry, so it does not affect your score. Duane Buziak uses NoTouch Credit Pull at the start so you learn which program fits before you see a single listing. That matters because the programs above have different price ceilings, credit floors, and property rules.
Illustration: a military family learns during an early review that they qualify for VA and that a funding fee exemption may apply. They set a price range around the VA numbers, not around a conventional down payment they would have struggled to save.
- Gather eligibility documents: a COE if you have one, recent pay stubs, and bank statements.
- Run the soft pull and review which programs fit your credit and income.
- Compare the options, including cash to close.
- Get a pre-approval letter that matches the program you intend to use. A full credit check follows when you formally apply.
Common mistake: shopping before pre-approval and falling for a property that does not fit the loan program, such as a home that will not meet VA property standards or one priced above your no-down maximum.
What to measure: the time from first contact to pre-approval, and how closely your pre-approved price range matches what you actually end up buying.
Where to Start: A Ranked Order for Zero-Down Decisions
Work in this order. First, confirm VA eligibility, including remaining entitlement if you have used it before, because it is the only widely usable zero-down route in the Richmond area. Second, check USDA only if the specific property is in an eligible area and your income qualifies. Third, fall back to FHA or Conventional 3% and fund the cash with documented gifts or one eligible assistance program. Skip any strategy whose eligibility test you have not verified in writing.
Whether you’re a veteran ready to use your hard-earned benefits or a homebuyer exploring your financing options, your path to homeownership starts with expert guidance you can trust. Connect with Duane today for a personalized consultation and discover the mortgage solution tailored to your unique goals in the Stafford County and Richmond area. Richmond Home Loans by Duane Buziak can start with a NoTouch Credit Pull so you know your options before you shop.