Zero Down Home Loans: Top 4 Grant Programs for First-Time Buyers

Think you need thousands saved for a down payment before you can buy a home? Think again. This video breaks down four real grant and loan programs available to Utah buyers — including state, city, government, and lender-level options — that can help you purchase a home with little to no money down.

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Thinking you need a big down payment to buy a home is one of the most common — and most costly — myths in real estate. The truth is, there are four distinct categories of grant and loan programs that can help Utah buyers get into a home with zero or very little money down. Here's exactly how each one works.

1. Utah Housing State Programs

Utah Housing is a state-funded program that allows buyers to purchase a home with zero down by lending you the down payment as a second mortgage on your home. It does come with a higher mortgage insurance rate, and you will pay back the down payment loan — but it removes the biggest barrier to entry for most first-time buyers.

For buyers purchasing new construction homes priced at $450,000 or below, there's an additional program offering up to $20,000 as a second mortgage at 0% interest. You repay it when you refinance or sell, but no interest accrues — making it one of the most favorable state-level programs available.

Who it's best for: First-time buyers who have stable income and good credit but haven't been able to accumulate a down payment.

2. Local City Grant Programs

Some cities and municipalities offer their own homebuyer grant programs designed to incentivize homeownership in specific neighborhoods — often areas they're trying to revitalize or stabilize. These grants can reduce or eliminate your down payment requirement entirely.

The trade-off: city-level programs are typically harder to qualify for. You usually need to buy in a specific target area, and income restrictions are strict — often requiring household income at or below 50–80% of the area median income (AMI). These aren't for everyone, but if you happen to qualify, they're excellent.

Who it's best for: Lower-income buyers specifically interested in or open to purchasing in city-targeted revitalization zones.

3. Government Loans: VA and USDA

Two federal loan programs offer true zero-down financing with no second mortgage required:

VA Loans — Available to U.S. military veterans and active-duty service members. This is widely considered the best zero-down loan program available, period. No private mortgage insurance, competitive rates, and no down payment. If you're a veteran, this should be your first call.
USDA Rural Housing Loans — Available to buyers purchasing in designated rural areas. If you're open to rural living, this program offers zero-down financing with competitive rates. There are income restrictions and stricter debt-to-income ratio requirements, but for buyers who qualify, it's a strong program.

Who it's best for: Veterans (VA) or buyers open to rural areas (USDA).

4. Lender Grant Programs (The Most Accessible Option)

This is the program most buyers can qualify for — and it's the most straightforward. As a first-time homebuyer, you're normally required to put down 3–3.5%. But if your household income is below 80% of the area median income for your county, you may qualify for a 3% down payment grant.

The difference from Utah Housing: this isn't a loan. The 3% is gifted to you as a silent second mortgage — meaning no monthly payments, no interest. You pay it off only when you sell or refinance. Until then, it sits quietly in the background while you build equity.

This program covers the widest range of buyers and can be combined with pre-approval screening for all other programs simultaneously.

Who it's best for: First-time buyers earning under 80% AMI who want the simplest path to zero-down homeownership.

How to Find Out Which Program You Qualify For

You don't have to figure this out alone. A single mortgage pre-approval can screen you for Utah Housing, city programs, lender grants, and USDA rural housing all at once. Most buyers are surprised by how many programs they qualify for.

The best first step is to take the free 60-Second Homebuyer Readiness Quiz or start a conversation to see where you stand.

People Also Ask

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so you're looking at buying a home and you need a little help for that down payment maybe you don't and you just want to see if you can get a little extra money now there are a lot of different Grant programs out there and I've compiled it into basically four different categories of grant money these four different categories are great ways to help you with that down payment or lack of down payment my favorite grant program is actually the last one that we'll talk about so let's start with the first program the first program is a state program so in the state of Utah you can buy a home with zero down going the Utah Housing route okay this is a state funded program essentially allows you to get into home with zero down the way it works is instead of you coming in with a down payment of 32% the state actually will lend you that down payment okay it's at a higher insurance rate and you do have to pay it back but it it allows you to get into a home with zero down another part of the state program right now if you do new construction so if you are looking for a home that's $450,000 and below and it's a new construction home you can get up to $20,000 as a second mortgage on the home essentially getting rid of that down payment that you would be required to do the nice thing about this program is instead of you paying it back at a higher interest rate it's actually at a 0% interest rate so you do have to pay it back but there's no interest on it the second category of grant money is typically on the local level the city level now these are programs that say a different city is trying to incentivize people to live in a certain area so it's not for the whole city often times it's for certain areas they're trying to revitalize maybe get more people living there that are are not renting but are homeowners these are great programs allows you to get into a home again with getting some grant money I would say the catch with these programs is essentially that they're very hard to qualify for again you have to find the right area and then again if you do find the right area great you do have to have income that's fairly quite below the area of medium income typically 50% for sure below 80% but a lot of times it's below 50% of the area median income so again very few people actually qualify for these great programs and again that may be you maybe you're the one that does qualify for it but again just little bit harder to qualify for but this is something that is out there okay local city programs third category is government loans okay there's two loans that require zero down VA loans for veterans and USDA or US Department of Agriculture Rural Housing loans also known as those two programs allow you to get into home with zero down now obviously for veterans that's pretty easy if you're a veteran you could qualify for this loan program it is by far in fact it is the best Loan program that we have for zero down okay it beats every other program we have so if you're a veteran hey talk to me cuz let's get going on that if you're not a veteran and you're looking for maybe a home in a rural area that rural housing loan is a great Loan program also the big catch with rural housing is you do have to live in what's considered a rural area if you're able to find a rural area and a home in it then again this program allows you to get in with zero down it does have income restrictions and it's a little picky on your debt to income ratios in other words how much of a home you can borrow and get as a proportion of your income so it's a little bit harder to get but again if you can qualify great Loan program the last category is lender programs and the reason I like this one the most is because uh more people can qualify for this program than any of these other ones normally on a home as a first-time home buyer you have to come in with 3 to 3 and 1 12% down but if you're a first-time home buyer and your income is below 80% of the area medium income which is determined by county then you would qualify for essentially a 3% down grant program what this means is that instead of you coming up with 3% down we gift it to you that 3% and so you don't have to come up with it it's similar to the Utah housing program that allows that second mortgage but with our program there's no interest on it there's no pay payments on it so it sits as just a silent second mortgage on your home that you would pay off once you refinance or sell the home again this allows you to get into home with zero down which saves you more money for all the other things that are going to come about when you buy a home there are a few other programs that I haven't really talked about that are subcategories of the ones that we have talked about in short if you're looking to buy a home and you want to see if you qualify talk to me so that we can figure out what programs you qualify for if you click the application below the nice thing is you're not just applying for one mortgaged you're applying for basically any program that we have to see if you qualify for it so we can pre-approve you for Utah Housing the city programs the lender programs and maybe even rural housing if you're looking out there we can pre-approve you for all of these programs at once if you have further questions chat with us today or go ahead and just fill out the application so that we can see where you're at and if this is something that you can qualify for

Topics Covered

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Zero Down Home Loans: Top 4 Grant Programs for First-Time Buyers