Here’s an eligibility breakdown for low down-payment mortgage programs.
1️⃣ VA Loan — 0% Down (Best if Eligible)
Who qualifies
- Active-duty military, veterans, National Guard/Reserves (with service requirements)
- Some surviving spouses
Key requirements
- Certificate of Eligibility (COE)
- Typically 620+ credit (lender dependent)
- Must occupy as primary residence
What disqualifies buyers
- No VA eligibility
- Severe recent credit issues
FSBO insight
- Extremely strong buyer
- No down payment + no PMI = higher affordability
- Seller credits can be used for closing costs and buydowns
2️⃣ USDA Loan — 0% Down
Who qualifies
- Buyers purchasing in USDA-eligible rural/suburban areas
- Household income usually ≤115% of area median income
Key requirements
- Primary residence only
- Typically 640+ credit for automated approval
What disqualifies buyers
- Property outside USDA map
- Income too high
- Poor credit history
FSBO insight
- Works surprisingly often in small towns & outskirts
- Pairing with seller credits can create near-zero cash-to-close
3️⃣ Conventional 3% Down (HomeReady / Home Possible / Conventional 97)
Who qualifies
- First-time buyers (generally no ownership in last 3 years)
- Moderate income (some programs cap income)
- 620+ credit
Key requirements
- PMI required
- Must be primary residence
What disqualifies buyers
- Recent bankruptcies/foreclosures
- High debt-to-income ratios
FSBO insight
- Very common
- Seller credits capped at 3% unless buyer puts ≥10% down
- Works well with temporary buydowns
4️⃣ FHA Loan — 3.5% Down
Who qualifies
- Credit score 580+ (sometimes lower with larger down payment)
- First-time and repeat buyers
Key requirements
- Upfront & monthly mortgage insurance
- Property must meet FHA condition standards
What disqualifies buyers
- Property condition issues
- Very high DTI
- Recent foreclosures (time-based)
FSBO insight
- Very flexible credit-wise
- Seller credits allowed up to 6%
- Great match for 2-0 buydown + closing credits
Eligibility Summary Table
| Program | | Min Down | | Credit | | Income Limits | | Seller Credits |
|---|---|---|---|---|
| VA | 0% | ~620 | No | Flexible |
| USDA | 0% | ~640 | Yes | Up to 6% |
| Conventional | 3% | 620+ | Sometimes | 3%–6% |
| FHA | 3.5% | 580+ | No | Up to 6% |
FSBO Takeaway
For maximum effect, suggest that your buyer seek a low down payment program:
- FHA (3.5% down)
- Conventional 3% down buyers
- USDA buyers in rural markets
- VA (0% down)
Then (rather than lowering to your rock-bottom price) add a buydown + closing cost credits. This strategy can fit nicely with these programs.