As the name implies, a zero-down mortgage is a house loan that does not need a down payment. A down payment is an initial payment you make toward purchasing a property, and it is due when the loan is closed. Down payments are often calculated as a percentage of the total amount borrowed by lenders. Only a government-backed loan will allow you to obtain a mortgage with no down payment. The federal government insures government-backed loans. In other words, if you stop paying your mortgage, the government (not your lender) foots the tab.