For many aspiring homeowners, the biggest hurdle isn’t the monthly mortgage—it’s the down payment. That’s where the FHA $100 Down Program steps in. This unique home buyer program was designed to make homeownership more accessible and allows eligible buyers to purchase certain HUD-owned homes with a down payment of just $100. Let’s explore how it works, who qualifies, and how it’s helping people turn the key to their first home.
How the FHA $100 Down Program Works
The FHA $100 Down Program is a special initiative by the Federal Housing Administration (FHA) and the U.S. Department of Housing and Urban Development (HUD). It’s available only for HUD-owned properties—homes that were previously financed with FHA loans and have since been foreclosed.
Instead of the standard 3.5% down payment required for FHA loans, this program allows buyers to put down just $100, making it nearly a no-money-down option.
Opportunities for FHA Home Buyers
This program opens doors—literally—for buyers who might otherwise be priced out of the market.
✅ Key Benefits
- Low upfront cost: Only $100 down payment required.
- Available nationwide: HUD homes are listed across the U.S.
- Potential equity: Many HUD homes are priced below market value.
- Repair financing: Can be combined with FHA 203(k) rehab loans.
- Closing cost assistance: HUD may cover some closing costs.
🔍 Eligible Properties
- Must be HUD-owned.
- Must be purchased as a primary residence.
- Must be listed as eligible for the $100 Down Program on the HUD Home Store.
FHA $100 Program Requirements
While the down payment is minimal, buyers must still meet standard FHA loan criteria.
Credit Score
- Minimum 580 for standard FHA approval.
- Some lenders may require 620+ for smoother processing.
Debt-to-Income (DTI) Ratio
- Ideal DTI: ≤43%.
- Manual underwriting may allow up to 50% with compensating factors (e.g., strong credit, cash reserves).
First-Time Homebuyer Status
- Not required—any eligible buyer can apply.
- However, first-time buyers often benefit most due to limited savings.
Additional Requirements
- Must submit a full-price offer.
- Must not have purchased a HUD home in the past 24 months.
- Must work with a HUD-approved real estate agent.
- Must use FHA financing.
Example 1: Jasmine’s First Home in Atlanta
Background: Jasmine, a 29-year-old teacher, had been renting for years. With a credit score of 645 and $3,000 in savings, she was ready to buy—but the typical down payment was out of reach.
Strategy:
- Jasmine found a HUD-owned home listed for $160,000.
- She applied through an FHA-approved lender and qualified for the $100 Down Program.
- Her DTI was 39%, and she had a stable two-year work history.
Outcome:
- Jasmine paid just $100 down and used her savings for closing costs.
- HUD covered $3,500 in closing costs.
- She moved into her first home with equity and a fixed-rate mortgage.
Takeaway: The program helped Jasmine leap from renting to owning with minimal upfront cost.
Example 2: The Thompsons’ Family Upgrade
Background: The Thompsons, a family of four, were living in a cramped apartment in Ohio. With a combined income of $85,000 and a credit score of 700, they wanted more space but didn’t want to drain their savings.
Strategy:
- They found a HUD home listed at $210,000.
- Their lender approved them for the FHA $100 Down Program.
- Their DTI was 36%, and they had $10,000 in reserves.
Outcome:
- They paid $100 down and used the FHA 203(k) loan to finance $15,000 in repairs.
- HUD covered $4,000 in closing costs.
- They moved into a newly renovated home with room to grow.
Takeaway: The program allowed the Thompsons to upgrade affordably and finance needed repairs.
Example 3: Turning Rent into Equity with Just $100 Down
Buyer: Michael B., St. Louis, MO
Background: Michael had a 620 credit score, a stable job, but limited savings. He was renting a two-bedroom apartment and paying $1,300 per month.
Solution: He found a HUD-owned three-bedroom home listed at $165,000 and qualified for the FHA $100 Down Program. He was approved for a 30-year fixed-rate FHA loan with a 6.375% interest rate. Michael used an FHA Limited 203(k) loan to include $10,000 in light repairs.
Result: Michael’s total monthly payment, including taxes and insurance, came to about $1,260—less than his rent. With just $100 down, he became a homeowner, built equity, and improved his living space.
6 Ways to Benefit from the FHA $100 Down Program
The FHA $100 Down Program is a unique opportunity for qualified buyers to purchase HUD-owned homes with just a $100 down payment, making homeownership significantly more accessible. Designed to stimulate home purchases and revitalize communities, this program is especially valuable for first-time buyers, low-to-moderate income families, and those who may not have a large cash reserve. Here are six key ways homebuyers can benefit from this program:
1. Buy a Home with Only $100 Down
The most obvious benefit is the dramatically reduced upfront cost. Traditional FHA loans require a 3.5% down payment, which can be thousands of dollars depending on the home price. With this program, buyers can secure a HUD-owned home with only $100 down, freeing up funds for other essentials like moving expenses, repairs, or emergency savings.
2. No Income Limits or First-Time Buyer Restrictions
Unlike many down payment assistance programs, the FHA $100 Down Program does not have income limits or require you to be a first-time homebuyer. As long as the home is a HUD-owned property and you intend to occupy it as your primary residence, you can qualify. This flexibility makes it attractive for a wide range of buyers.
3. Access Competitive FHA Loan Rates
Buyers using the $100 Down Program still benefit from FHA’s competitive interest rates and more lenient credit guidelines. This means even buyers with lower credit scores or past financial hardships may qualify for a low-rate mortgage. The FHA also allows higher debt-to-income ratios than many conventional loans, improving your chances of approval.
4. Include Repairs in Your Loan
HUD homes are often sold “as-is,” but FHA allows you to roll repair costs into your loan using the FHA 203(k) or Limited 203(k) renovation loans. This lets you finance both the purchase and improvements with a single loan and still take advantage of the $100 down benefit, making it easier to turn a fixer-upper into a livable, modern home.
5. Build Equity Faster
Because you’re starting with such a low upfront investment, any improvements or appreciation in home value will result in quicker equity gains. This is particularly helpful for buyers looking to grow wealth through homeownership or possibly refinance into a better loan in a few years.
6. Strengthen Communities
HUD homes are often located in areas that could benefit from revitalization. By purchasing and occupying these homes, buyers help stabilize neighborhoods, raise property values, and invest in the community’s future—while also gaining affordable access to homeownership.
Combining With FHA 203(k) Rehab Loans
Many HUD homes need repairs. The $100 Down Program can be paired with the FHA 203(k) loan, which lets buyers finance both the purchase and renovation costs.
Eligible Repairs
- Roof replacement
- HVAC upgrades
- Kitchen/bath remodels
- Flooring and paint
- Accessibility improvements
This combo is ideal for buyers who want to build equity while customizing their home.
Limitations to Consider
While the program is powerful, it’s not without caveats:
- Limited inventory: HUD homes may not be available in all areas.
- As-is condition: Homes are sold as-is; inspections are crucial.
- Lender participation: Not all FHA lenders offer the $100 Down Program.
- Competition: HUD homes can attract multiple bids.
The FHA $100 Down Program is a game-changer for buyers with limited savings. Whether you’re a first-time buyer or simply looking for a low-cost path to homeownership, this program offers a rare opportunity to buy with minimal upfront investment.
Pros:
- You’re buying a HUD-owned home.
- You plan to live in the property.
- You meet FHA loan criteria and want to minimize upfront costs.
Cons:
- You’re buying an investment property.
- You need a home in an area with few HUD listings.
- You’re unable to meet FHA credit or income requirements.
Takeaway on FHA $100 Down Program
The FHA $100 Down Program is an excellent option for buyers looking to enter the housing market with minimal upfront costs. Whether you’re a first-time buyer or returning to homeownership, this program offers flexibility, affordability, and a pathway to building long-term equity. Partner with an FHA-approved lender to explore eligibility and available HUD listings in your area.