“They’re Back… Again”: The Return of No-Down Payment Loans

Normally, I draw inspiration for these articles from rock music, but today I turn to a classic film from 1986—Poltergeist II: The Other Side. In one memorable scene, Carol Anne declares, “They’re back… again.” That line is an apt description of today’s development in the mortgage market: the return of no-down payment loans.

These programs are back—and in a more disciplined form than the ones that preceded the 2008 housing crisis. This latest version allows borrowers to purchase homes without any down payment, with loan amounts up to $688,850 in most Metro Atlanta counties. There are no restrictions based on income, location, or first-time buyer status, and sellers can contribute up to 6% toward closing costs or interest rate buydowns. In effect, many buyers could step into homeownership with little to no cash required at closing.

Remembering the Past

For many, the phrase “no down payment” evokes memories of the housing crash. Between 2008 and 2012, the market was flooded with foreclosures, and these loan products were often blamed. But the reality is more complex. The true culprits were irresponsible lending practices—stated-income and stated-asset loans that bypassed verification, negative-amortization mortgages, and adjustable-rate loans with minimal caps. These “exotic” products left borrowers highly vulnerable once payments reset or values declined.  Down payments, or the lack thereof, played a role, but they were far from the primary driver. The crash was rooted in weak underwriting and speculative lending practices, not in the simple fact that some buyers entered the market with no money down.

Why This Time Is Different

The lending environment in 2025 looks very different from that of 2005. Exotic products have been eliminated, underwriting guidelines are far stricter, and credit score requirements are far more meaningful. Every borrower must now demonstrate their ability to repay with verified income and assets.

From an economic perspective, this matters. For many households, particularly first-time buyers, the largest obstacle to homeownership is not the monthly payment, it’s accumulating the upfront down payment. Wages have lagged behind both inflation and home prices, making it difficult for otherwise qualified buyers to save the required 3–20% down payment. Eliminating this barrier responsibly, under today’s tighter rules, could open homeownership to thousands of families who have been shut out of the market.

Expanding Access Responsibly

Critically, today’s no-down payment loans are fixed-rate, fully amortizing mortgages. They are designed to build equity rather than defer it. Unlike the pre-crisis era, buyers won’t be placed into loans where payments balloon or balances grow over time. Instead, they’ll make predictable payments that steadily reduce principal, just as traditional mortgages always have.

For aspiring buyers, particularly younger households and working families, this program could mark a turning point. It creates a pathway to homeownership that has been closed, not because of inability to afford a home long-term, but because of the short-term barrier of the down payment. So yes… no-down payment loans are back. But this time, they’re back with guardrails, accountability, and stronger underwriting. For many households, that may make the difference between renting indefinitely and building a future through homeownership.

As Carol Anne might say “they’re back” and this time, it may be for all the right reasons.