The phrase hides two different questions. One is whether a lender will hand you the whole price of a rental, and the answer there is short. The other is whether you can buy one without writing the down payment check yourself, and that one has real answers.
Will a lender finance 100% of a rental?
Not a conventional one. As of October 2026, Freddie Mac caps a one-unit investment property purchase at 85% of the price, and two to four units at 75%. So 15% down is the floor on a house you will rent out, and a quarter down is the floor on a small building.
The two loans that do go to zero both come with the same condition attached. A VA-backed purchase loan needs no down payment “as long as the sales price isn’t higher than the home’s appraised value,” and charges no mortgage insurance, but the requirements include that “you will live in the home you’re buying with the loan.” FHA’s 3.5% is nearly as low, and HUD’s rulebook says at least one borrower “must occupy the Property within 60 Days of signing the security instrument and intend to continue occupancy for at least one year.”
That is not a loophole to route around. It is the whole design: those loans are cheap because somebody lives there.
What would a 100% loan still cost?
Suppose a lender did write one. Take the $250,000 house that rents for $2,750 a month, with $3,000 a year of property tax and $1,400 of insurance, on a 30-year loan at an assumed 7%.
Principal and interest on the full $250,000 is $1,663 a month. With nothing down, the calculator’s mortgage insurance estimate of 0.84% of the loan a year adds $175. Tax is $250 and insurance $117, so the monthly payment is $2,205. Fannie Mae wants six months of that in reserves on an investment property, and closing costs are not financed either.
| Cash | |
|---|---|
| Down payment | $0 |
| Closing costs (3% of the price) | $7,500 |
| Reserves: six months of the $2,205 payment | $13,230 |
| Cash you need | $20,730 |
These are example figures, not a quote.
Then there is the month itself. At 20% down this house pays about $420. Financed in full, the same rent and the same bills leave it $87 short every month, because the payment grew by $333 and the mortgage insurance by $175. Its debt service coverage ratio, the rent after operating costs divided by the loan payment and the insurance premium, lands at 0.95: below 1.00, which is where the rent stops covering the debt on its own.
So the honest version of the question is not “can I get to zero.” It is “whose money covers the gap, and what does it cost.”
What routes do people actually use?
Four of them come up again and again. Each one puts somebody else’s money or your own existing equity in front of the purchase, and each one charges for it.
| What it asks of you | Smallest down payment | |
|---|---|---|
| Live in it: an FHA loan | Move in within 60 days and intend to stay a year | 3.5% of the price |
| Live in it: a VA loan, if you qualify | Live in the home, and buy at or under the appraisal | None, in most cases |
| Borrow against a home you own | Your own home secures the new debt | None in cash, but the balance is a debt you carry |
| A partner’s cash | You give up a share of the rent and of the sale | None of your own |
The first two are the same strategy at different prices, and both turn a rental purchase into a place you live. On a two to four unit building that means you rent the other units and the building helps pay for itself. Read what house hacking is actually like before you treat it as a financing trick: the people on the other side of the wall are your tenants.
Borrowing against a home you already own moves the down payment rather than removing it. A line of credit used for a rental down payment still has a payment, and that payment is secured by the house you sleep in.
A partner solves the cash problem by selling part of the deal. Work out what share buys the whole down payment before you talk to anyone, because that share lasts as long as you both own the property. On this house, $57,500 of someone else’s cash against $420 a month of rent is the trade you are proposing, and it is worth writing down in those terms before the conversation turns friendly.
One route that is not on the list: borrowing the cash and hoping the reserve line takes it. On an FHA loan it will not, because HUD’s rulebook says reserves do not include “borrowed funds from any source”, or equity in another property. The gap between what you have and what the purchase needs is the real constraint, and no structure makes it disappear.
What about seller financing?
A seller who owns the house outright can carry the note themselves, and their terms are whatever you both agree to. In practice that often means a smaller down payment than a bank wants, and it is the one route where “no money down” sometimes happens in real life. Seller financing on a rental works through what a seller’s note does to the monthly numbers.
Read the term before the rate. Seller notes frequently end in a balloon payment, which the CFPB describes as “a large, one-time payment at the end of the loan term.” Its warning is worth taking literally: “A mortgage with a balloon payment can be risky because you’ll owe a larger payment at the end of the loan,” and if you cannot make it or refinance it, you could lose the property. A five-year note means you are buying a refinance in five years at a rate nobody can tell you today.
What should you work out first?
Start from the reserve line, not the down payment. It is the part nobody advertises, it cannot be borrowed, and on this house it is larger than the closing costs.
Then run the house twice in the rental calculator, once at 15% down and once at whatever the route you are considering actually requires, and compare the monthly result rather than the cash. A deal that needs none of your money and loses $87 a month is still a deal that costs you $1,044 a year. For the full list of what the first purchase takes, see how to buy your first rental property.