Mortgage with low down payment and no PMI

Finding a low down payment mortgage that completely avoids private mortgage insurance (PMI) is entirely possible, though these programs usually require meeting specific employment, military, geographic, or income criteria.

The primary mortgage options that feature low or zero down payments without monthly PMI include:

• VA Loans: Guaranteed by the Department of Veterans Affairs, this program offers $0 down and no monthly PMI . It is available to eligible active-duty service members, veterans, and surviving spouses. While there is a one-time VA funding fee (which can be rolled into the loan), there is never any ongoing monthly mortgage insurance. You can review complete eligibility requirements directly through the VA Home Loans Guide.lower.com
• USDA Loans: Backed by the U.S. Department of Agriculture, USDA loans offer $0 down for properties located in designated rural and suburban areas. Instead of traditional PMI, they charge a low annual fee (around 0.35% of the loan balance), which is structured differently than conventional PMI. Income limits apply based on the area.lower.com
• Special Lender-Specific Programs: Some major national banks and specialized lenders offer proprietary portfolio loans designed for low-to-moderate-income buyers or specific census tracts that waive PMI entirely. For instance, the Bank of America Affordable Loan Solution Program provides low down payment options with no up-front or ongoing PMI.
• Credit Union Special Products: Many local and national credit unions (such as Navy Federal Credit Union or regional credit unions) design custom 100% or low-down-payment financing products for their members that completely exclude PMI, sometimes substituting a slightly different rate structure or portfolio fee instead.navyfederal.org+1
• NACA (Neighborhood Assistance Corporation of America): NACA offers a well-known program featuring $0 down, no closing costs , a below-market fixed rate, and no PMI , though it requires strict income qualification, homebuyer counseling workshops, and community advocacy participation.

To help narrow down which of these options you might qualify for, please share:

• Are you or your spouse an active-duty military member or veteran?
• Roughly what geographic area or type of location (urban, suburban, rural) are you looking to buy in?
• What is your estimated household income range relative to your local area?

If you're looking for a mortgage with a low down payment and no private mortgage insurance (PMI), you have several good options. You may be able to buy a home with as little as 0%–3% down and avoid traditional PMI, depending on your eligibility.

The key is to compare the total monthly payment, not just the down payment. Some loans eliminate PMI but charge a different fee, a higher interest rate, or another form of mortgage insurance.

Best mortgage options to consider

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1. VA loan — 0% down, no PMI

(Best if eligible)

For eligible veterans, active-duty service members and some surviving spouses. No monthly mortgage insurance is required, though a one-time VA funding fee may apply unless you're exempt.www.va.gov+1

Official resource:VA home loan program

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2. Conventional loan with lender-paid mortgage insurance (LPMI)

Often available with a low down payment, potentially 3%–5%. The lender pays the mortgage insurance, so you don't have a separate monthly PMI charge. However, the interest rate is usually higher, and the insurance cost generally isn't removable independently of refinancing or paying off the loan.

Ask lenders specifically for a quote with “lender-paid MI” and compare the APR.

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3. USDA loan — potentially 0% down

For eligible homes in qualifying rural and suburban areas, subject to income and other requirements. USDA loans don't use conventional PMI, but they generally have an upfront guarantee fee and an annual fee. Learn more:USDA Single Family Housing Guaranteed Loan Program

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4. Conventional loan with a 3% down payment

Programs such as Fannie Mae HomeReady and Freddie Mac Home Possible can help eligible buyers purchase with just 3% down. However, these programs generally still require mortgage insurance when you put down less than 20%, although it may be reduced.yourhome.fanniemae.com+1

These are worth comparing if you're willing to consider reduced PMI rather than requiring none.

What I would prioritize

If you want low down payment and absolutely no monthly PMI, I'd check eligibility for a VA loan first, then compare conventional lender-paid MI and USDA financing if you qualify.

Let me narrow this down to the best options for you

I can help you identify lenders and programs to investigate, including options in Michigan if that's where you're buying. First, what's your situation?

1. How much can you put down?

0% — nothing down

1–2%

3–5%

5–10%

10% or more

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2. Are you eligible for a VA loan through military service?

Yes

No

Unsure

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3. Are you a first-time homebuyer?

Yes

No, I've owned a home before

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4. Approximately where is your credit score?

Below 620

620–679

680–699

700–739

740+

Not sure

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5. Where are you buying?

[Input placeholder: City, state, or ZIP code] (Current value unavailable.)

[Find my best mortgage options]

With those details, I can narrow the choices and help you compare the real cost of avoiding PMI rather than simply finding a loan advertised as “no PMI.”

Absolutely. There are several home loan options that let you buy a home with a relatively small down payment without paying a separate monthly private mortgage insurance (PMI) bill. The key is knowing which programs eliminate mortgage insurance entirely and which simply build its cost into your interest rate or other fees.

Since you're looking in the U.S., here are the options I'd investigate first.

Best home loan options with low down payments and no monthly PMI

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1. VA home loan

(Best if eligible)

Down payment: 0% in many cases

• No monthly PMI or mortgage insurance premium.
• Competitive loan terms may be available.
• For eligible veterans, service members and some surviving spouses.
• A one-time VA funding fee may apply, although some borrowers are exempt.

This is one of the strongest options if you qualify.www.va.gov+1

Explore official VA loan eligibility

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2. USDA rural development loan

(Potentially 0% down)

• Often requires no down payment.
• Designed for eligible homes in qualifying areas, including some suburbs.
• Has income and property eligibility limits.
• No conventional PMI, but USDA guarantee fees apply, including an ongoing annual fee.

This can be a good fit if the property and household income meet the program rules.Explore USDA home loan programs

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3. Conventional loan with lender-paid mortgage insurance

(Worth comparing)

Down payment: sometimes 3%–5%

• Some lenders offer conventional mortgages without a separate monthly PMI charge.
• The lender pays the mortgage insurance cost, usually in exchange for a higher interest rate or other pricing adjustments.
• You may pay more interest over the life of the loan, even though no PMI line appears on your bill.

Ask lenders specifically for a quote with lender-paid mortgage insurance (LPMI) and compare the APR and total cost. Standard low-down-payment conventional loans generally require mortgage insurance.yourhome.fanniemae.com+1

Understand conventional mortgage insurance

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4. Conventional loan with a second mortgage

Down payment: potentially around 10% of the purchase price, split between loans

• An arrangement such as an 80/10/10 loan uses an 80% first mortgage, a 10% second mortgage and a 10% down payment.
• Because the first mortgage is at 80% of the home's value, it generally avoids PMI.
• You must qualify for both loans, and the second loan has its own interest rate and payment.

This can be useful if you have some savings but don't have 20% available. Availability depends on the lender and your qualifications.

If you're buying in Connecticut

If you're shopping around Bloomfield or elsewhere in Connecticut, I'd also investigate the Connecticut Housing Finance Authority (CHFA). It offers programs that can reduce the cash you need at closing.

Connecticut assistance worth checking

Time To Own

A forgivable down-payment assistance loan for eligible buyers, used alongside a CHFA first mortgage. It has 0% interest and no monthly payment; 10% of the principal is forgiven annually over 10 years. Funding is limited.www.chfa.org+2

Check Time To Own eligibility and funding

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CHFA Next Move

A program for eligible first-time and repeat buyers that offers deferred down-payment assistance of up to 3.5% of the first mortgage amount at 0% interest. Mortgage insurance may still apply, so ask about pairing it with an option that avoids a separate PMI payment.www.chfa.org+1

Explore CHFA mortgage programs and participating lenders

Let's narrow this down to the best options for you

The right loan depends on your eligibility, savings and income. I can help narrow the list to realistic choices rather than just giving you generic loan types.

1. Are you eligible for a VA loan through military service?

Yes, or possibly through an eligible spouse

No

Not sure

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2. How much could you put down?

0% down

1–3%

3–5%

5–10%

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3. Would this be your first home purchase?

Yes

No

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4. What purchase price are you targeting?

Under $200,000

$200,000–$300,000

$300,000–$400,000

$400,000+

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5. Roughly where is your credit score?

Below 620

620–679

680–739

740+

Not sure

[Find my best loan options]

You can also start with Compare no-PMI loan options in Connecticut or Estimate my monthly mortgage payment.