Some FAQs

About Zero Down

What is Zero Down?

Zero Down is an affordable homeownership solution in the San Francisco Bay Area.
Homeownership here — even thinking of it—has become financially impractical. We end up paying rent as a cheaper, but wasteful alternative.
Here's what we propose: We buy the home you want, you move in without a down-payment, and instead of paying rent to your landlord, you pay us towards owning your house. In short, you build ownership in your home every month. Home equity vests to you monthly, just like stock options at your workplace.
Zero Down blends the security of ownership with the flexibility of renting.

What is home equity?

Your home equity represents your ownership in the home. If you’ve accumulated 2% of home equity, you own 2% of your home, i.e., if your home is worth $1,000,000 your equity is worth $20,000.

How can I use the equity that I will accumulate?

Zero Down equity has a 2 year cliff - you have to live in your home for at least two years before the equity is yours. After 2 years, you can move out at any time and:

  • Buy the home from us at a predetermined price (and use your equity towards down payment).

  • Cash out your accumulated home equity by selling it to us.

Who is Zero Down for?

Zero Down is best for people who are:

  • Thinking about buying a home, but don’t have a down payment. For example, you may be actively paying off student loans and have fewer savings despite a high paying job.

  • Looking for flexibility. Zero Down lets you move out without the hassle of selling the home.

  • Not able to find a rental property they like. You might like a neighborhood closer to work or with good schools but realize that for-sale inventory of homes is a lot larger than rentals.

What is Zero Down business model?

As your equity partner, our incentives are completely aligned with yours -- we both make money if the home value goes up.
We work with real estate broker partners and split their broker commissions with them.
We are backed by real estate investors from whom we earn a small fee for managing a portfolio of homes for them.

Zero Down Guarantee

What happens if my home goes up in value?

As an equity partner you get to participate in your home appreciation. The value of your equity increases with the home value. For example, if you accumulated 5% of a house which appreciated from $1,000,000 to $1,500,000 the value of your equity increased in value from $50,000 to $75,000.

What happens if my home depreciates in value?

As an equity partner, you will be impacted by home depreciation, but only on the portion of the equity you own. For example, if you accumulated 5% of a house which depreciated from $1,000,000 to $900,000 the value of your equity decreased in value from $50,000 to $45,000.
Unlike mortgage, Zero Down effectively offers you downside protection if your home depreciates in value.

Who owns the title to the home?

Zero Down owns the title to the home.

Zero Down vs Mortgage vs Rent

How does Zero Down compare to getting a mortgage?

While Zero Down provides the benefits of homeownership, monthly payments to Zero Down are not mortgage payments. In addition, there are a few more important differences:

  1. Zero Down has no down payment requirement. Mortgage lenders have down payment requirements and mandate expensive insurance if the minimums are not met.

  2. Mortgage adds to your overall debt. With Zero Down, you get to accrue home equity without adding on to your overall debt.

  3. Unlike mortgage, Zero Down effectively offers you downside protection if your home depreciates in value. As the majority of the equity is with Zero Down your loss is only a small percentage of the depreciation.

How does Zero Down compare to paying rent?

While Zero Down offers the flexibility of renting there are a few important differences:

  1. You build equity in the home you are living in as you make monthly payments.

  2. You have the option to buy the home anytime after the first 2 years when you can exercise your accrued equity.

  3. The Zero Down home is your home. You are free to make improvements and fixes which will only increase the value of your equity in the home.

Does Zero Down impact my credit score?

Zero Down qualification requires a soft credit check. Zero Down is not a loan and does not affect your credit score. However, if you make consistent, on-time payments to Zero Down we will report them to the Credit Bureaus to improve your credit score for future loans.

How should I evaluate Zero Down against other options?

Zero Down is best suited for people who want to own a home but:

  1. can't afford to make a down payment

  2. don't want to put all of their savings towards a down payment

  3. would like to retain the flexibility of renting

Zero Down provides a completely new way to own a home. So any comparison with alternatives should weigh all the costs and benefits as well as the buying, living, and selling experience.

Zero Down homeownership

What kind of homes can I buy with Zero Down?

You can buy a single family home, townhouse or a condo with Zero Down. That said, we do have some restrictions on what type of condos that you can buy with Zero Down - this will be determined on a case by case basis.

How quickly do I build ownership (what does my vesting schedule look like)?

Your home equity vests to you over 5 years. We use a monthly vesting schedule with a cliff of two years.
For example, if you bought a $1,000,000 home in San Jose, your vesting schedule will look as follows:

Duration Ownership Percentage Vested
After 12 months (*) 0.00%
After 24 months 2.76%
After 36 months 4.17%
After 48 months 5.57%
After 60 months 6.90%
(*) Vesting schedule has a cliff of 2 years / 24 months.

How many years do I have to live in the home to get ownership (what’s the cliff)?

Zero Down equity has a 2 year cliff - you have to live in your home for at least two years before the equity is yours. After 2 years, you can move out at any time and:

  • Buy the home from us (your equity can be used towards down payment).

  • Receive cash for your accumulated home equity.

What happens if I want to leave before 2 years?

If you leave before two years, you won’t vest any equity in your home.

What happens if I want to leave after 2 years?

After 2 years, you can move out at any time and:

  • Buy the home from us (your equity can be used towards down payment).

  • Receive cash for your accumulated home equity.

Can I buy my home from Zero Down?

Yes you can! Zero Down allows you to buy the home from us at any point after 2 years. You can even use your equity towards the down payment. You can then get a conventional mortgage and buy the home from us at a predetermined price (which will be agreed upon at the time of your move-in).

Can I cash out home equity when I leave?

Yes, you can receive a cash payment for your accumulated home equity if you decide to leave after 2 years. The cash out intent will trigger an onsite appraisal visit to establish a fair market value of the house. We will then buy back your home equity at the appraised value of the house.

How long can I live in Zero Down home?

You can live in Zero Down home for up to 5 years. At the end of the 5 year mark you have to decide whether you want to purchase the home from us or cash out your equity.

We are working with our partners to provide longer term options and ability to extend / roll over Zero Down.

Can I make improvements to my home?

Absolutely. You can make any improvements or modifications to the home as you see fit. The quality of the home and any improvement to the home contributes to the home value which reflects positively on your equity when you cash out.

Can I sublet or sublease my home?

Your Zero Down home has to be your primary residence.
You cannot sublease your entire home. However, you can sublet or AirBnB rooms in your home as long as you still occupy the house.

Qualifying for Zero Down

How do I qualify for Zero Down?

To apply, first sign up and link your bank account, which allows us to confirm your income. We then work with you to determine what monthly payments you can afford. This is based on a number of factors including, but not limited to, your annual household income, debt obligations, financial history, and employment status. We then establish your home value budget.

For example, if you can afford a $6,000 monthly payment, then the limit on the home you could purchase is approximately $1,000,000.

Do I need a down payment to qualify?

No, you absolutely do not. Only monthly payments are required.

What information do I need to provide to Zero Down?

When you sign up and link your bank account with Zero Down, we should be able to get everything we need from there. If we happen to need any other information from you, we'll reach out separately.
The only information we need in addition is for you to provide 3 references who we can talk to.

How long does it take to process my application?

Once you sign up and link your bank account, it should take less than 5 minutes to give you your home value eligibility.
Reference checks and final approval can take up to 48 hours (depending on your references' availability)

Is there an application fee?

No, there is no application fee.

Monthly payments

What are the monthly costs of owning a house?

Your monthly costs on a Zero Down home will be less than your monthly costs for a fixed-prime-rate traditional mortgage.
The table below is for a $1,000,000 home in the San Francisco Bay Area. We’ve used the Bay Area median values to calculate property taxes (with insurance). Actual costs will depend on the specific home and location. The comparison is against a 30-year fixed-mortgage with 10% down payment and 5% interest.

zerodown Mortgage
Total Monthly Payment $6,166 $6,379
Breakdown
Monthly Payment $6,166 $4,831
Taxes & Insurance $0 $1,083
Private Mortgage Insurance (PMI) $0 $465
Do I need to pay property taxes or home insurance in addition to my monthly payment?

No, your monthly payment to us is inclusive of ALL OF YOUR costs. You don’t need to make any additional payments above your monthly payment.
Once you select a home, your monthly payment will be determined and that's the only amount you'll ever need to worry about!

Do I need to pay the monthly HOA?

No, Zero Down takes care of the HOA, in addition to taxes and insurance. Once you select a home, your monthly payment will be determined and that's the only amount you'll ever need to worry about!

Who is responsible for home maintenance costs?

As the resident and equity partner of the property, you are responsible for it's maintenance. The same goes for any re-design or improvements that you want to make to the property.
For any large repair -- such as a roof replacement or HVAC breakdown, Zero Down will help you take care of it.

Are my monthly payments tax deductible?

No, these payments are not tax deductible.

Buying a home with Zero Down (What’s the process?)

What is the home buying process like?
  1. Sign up and Qualification
    We will collect the required financial information from you and work with you to determine the maximum monthly payment you can afford. This in turn determines the maximum value of the home you can buy. It will take you less than 5 minutes to provide your information to us and we will get back to you with the limits as soon as possible.

  2. Choosing your home
    After the qualification, you will be introduced to our partner agent who will help you find and tour properties for sale in your preferred neighborhoods. At this point, if you have already identified a property that you like, feel free to let us know.

  3. Purchasing the home and move in
    Once you have narrowed down on the home you like, we will go through the bidding process together. When our offer is accepted, Zero Down will close the home on your behalf. You will enter into an agreement with us that clearly lays out all the necessary details including but not limited to move-in date, monthly payment, your rights and responsibilities.

Who pays the closing costs?

Zero Down takes care of all the costs when purchasing the property. You just have to worry about the one monthly payment.

Can I select any house I want?

Yes, any house on the market within the qualified price range.

Which areas does Zero Down operate in?

Zero Down currently operates in San Francisco Bay Area only.

What price range should my house be in?

Zero Down will tell you the price range after the qualification process. Typically the house has to be between $650,000 and $1,500,000 for final offer.

Can I use my own agent?

We prefer you use Zero Down's vetted real estate agents who understand the service and have excellent knowledge of the Bay Area housing market. That said, we are also happy to partner with your agent, if you already have one and love working with them.

Have more questions? Email us