For many aspiring homeowners, the biggest hurdle isn’t monthly mortgage payments — it’s the down payment. In 2025, with housing prices still high and savings stretched thin, even 3.5% down on an FHA loan can be a lot. But there’s a lesser-known program that could change everything for eligible buyers:
Introducing the FHA $100 Down Payment Program — a government-backed initiative that lets qualifying homebuyers purchase certain HUD-owned properties with just $100 down.
For many renters, the thought of owning a home feels just out of reach — not because of monthly payments, but because of the upfront cash. That was exactly the case for Angela M., a preschool teacher in Missouri, who never thought she'd be able to buy a home on her own. “I had $1,200 in savings and was about to sign another lease,” she says. “Then my realtor mentioned the $100 Down FHA program. I applied, was approved, and closed on my first home with less than $1,000 out of pocket.”
With rising rent and interest rates still high in 2025, many first-time buyers are exploring overlooked programs designed to reduce upfront costs. One of the most powerful options? The FHA’s $100 Down Program. Real estate professionals say it's especially helpful in smaller cities and rural areas where HUD-owned homes are more common. “In North Carolina alone, we’ve seen dozens of families use this program to buy homes with savings they already had in checking,” says LaToya R., a HUD-registered agent based in Raleigh. “No extra loans, no waiting.”
This guide breaks down what the $100 FHA loan is, who qualifies, how to apply, what to watch out for, and why it’s gaining attention among first-time buyers across the U.S.
What Is the FHA $100 Down Loan?
The $100 Down Payment program is a specific FHA financing option offered in connection with the U.S. Department of Housing and Urban Development (HUD).
Here’s what makes it unique:
- Only applies to HUD-owned homes (foreclosed FHA properties)
- Down payment is just $100 — not 3.5%
- Available to owner-occupant buyers using an FHA loan
- Must submit a full-price offer on a qualifying HUD property
- Additional costs (closing costs, repairs) can often be financed
"This is one of the most underutilized FHA programs today," says Tina M. Ricks, a HUD-licensed real estate broker in Orlando. "For buyers with limited savings, it opens a door they thought was closed."
How Does the $100 FHA Loan Work?
- Search for HUD-owned homes in your area
- Use HUDHomestore.gov
- Select “FHA Financing: $100 Down” in the search filter
- Work with an FHA-approved lender
- Not all lenders offer this program
- Choose one familiar with HUD REO sales
- Get pre-approved
- Credit score of at least 580 typically required
- Proof of steady income and employment
- Acceptable debt-to-income (DTI) ratio (usually under 43%)
- Submit a bid through a HUD-registered agent
- Must offer full listing price
- Indicate that you’re using the $100 Down option
- Complete FHA underwriting & close
- Closing may take 30–60 days
- You can finance repairs with an FHA 203(b) or 203(k) option
Who Qualifies for the $100 Down Program?
- Must live in the home as a primary residence
- Property must be HUD-owned and eligible
- Must use an FHA-insured loan
- Most lenders require a minimum 580 credit score
- Must meet standard FHA guidelines on income, assets, and DTI
📊 Data & Program Reach
- According to HUD.gov, over 14,000 HUD homes were listed in 2024 — many eligible for the $100 program
- FHA loans accounted for 12.4% of all new home purchases in 2023 (source: MBA)
- The average down payment in the U.S. in 2024 was over $10,000 — making this program a major savings opportunity
“In today’s market, even a few thousand dollars can make or break a home purchase,” says Kevin Brady, a loan officer with FHA Direct. “This program levels the playing field for buyers who don’t have help from family or large savings.”
Pros and Cons to Consider
✅ Benefits:
- Ultra-low upfront cost
- Backed by the U.S. government (FHA)
- May allow for repair escrow or renovation funds
- Builds equity quickly for eligible buyers
- Great for first-time buyers or renters transitioning to ownership
⚠️ Potential Drawbacks:
- Only applies to HUD-owned homes — inventory is limited
- Must submit full-price offers — no negotiation
- Properties may need repairs
- Strict timelines and paperwork
- Must use FHA loan only (no conventional)
🧰 Resources, Tools & Apps
- 🏠 HUDHomeStore.gov: View eligible homes
- 💰 FHA.com Lender Finder: Match with approved lenders
- 📱 Rocket Mortgage, FairwayNow App, LoanDepot – for mobile pre-approvals
- 📘 ConsumerFinance.gov: FHA loan breakdown
- 🔍 NerdWallet, LendingTree – compare lender terms and costs
❌ Common Mistakes to Avoid
- Assuming all FHA homes qualify – Only HUD-owned REO homes do
- Skipping pre-approval – Your lender must approve you before bidding
- Overlooking home condition – Some HUD homes may need major repairs
- Not working with a HUD-approved agent – This is required for all bids
- Confusing it with first-time buyer grants – This is a loan program, not a grant
Final Thoughts
The $100 Down FHA Loan program isn’t for everyone — but for eligible buyers who meet the criteria, it can be one of the most affordable paths to homeownership in 2025. If you’re tired of renting or struggling to save for a traditional down payment, this option might be worth a serious look.
The key is to partner with a knowledgeable FHA lender, search actively on HUD’s platform, and move quickly when an eligible property hits the market.
FAQs
Q: Is this program only for first-time homebuyers?
A: No. Anyone can apply, but you must live in the home as a primary residence.
Q: Can I use this for investment or vacation properties?
A: No. The program only applies to owner-occupied homes.
Q: Can I still get closing cost assistance?
A: Yes, some states and lenders offer additional help — ask your lender.
Q: Are these homes usually move-in ready?
A: Some are, but others may need repairs. An FHA 203(k) loan can help cover those costs.
Disclaimers
- This article is for educational purposes only and not financial or legal advice.
- Availability of the $100 Down program is subject to HUD listings and lender participation.
- All loan approvals are subject to credit, income, and underwriting requirements.
- Please consult a licensed loan officer or HUD-approved counselor before applying.
