Separating myth from reality
One of the most common questions buyers ask is also one of the most misunderstood: “How much do I need for a down payment?”
Most people grew up hearing that they must put 20% down to buy a home—but that simply isn’t true anymore. Today’s mortgage programs are designed to meet buyers where they are, not where tradition says they should be.
Let’s break down the real numbers.
Minimum Down Payments by Loan Type
FHA Loans: 3.5% Down
FHA loans are popular for first-time buyers and anyone who wants easier qualifying guidelines. With as little as 3.5% down, borrowers can secure financing with flexible credit and income requirements. FHA is often the go-to choice for buyers rebuilding credit or aiming for a lower down-payment option.
Conventional Loans: As Low as 3% Down
Many people are surprised to learn that conventional loans offer 3% down options for qualified borrowers. This includes programs geared toward first-time homebuyers and even some repeat buyers. Conventional loans also allow higher down payments for borrowers wanting to avoid mortgage insurance sooner.
VA Loans: 0% Down (Eligible Veterans & Service Members)
VA loans remain one of the strongest benefits available to our nation’s Veterans and active-duty personnel. With no down payment required, no monthly mortgage insurance, and competitive rates, VA financing offers unmatched affordability for those who qualify.
USDA Loans: 0% Down (Rural Areas)
For properties in eligible rural zones, USDA loans provide 100% financing with income-based qualification rules. It’s an excellent option for buyers open to homes outside urban areas.
Should You Put More Down? Pros & Cons
Benefits of Putting Less Down
- Keep more cash on hand for emergencies or home improvements
- Enter the market sooner instead of waiting years to save
- Take advantage of lower-down-payment programs designed to help buyers build wealth earlier
Benefits of Putting More Down
- Lower monthly payments
- Less or no mortgage insurance, depending on the loan
- Improved interest rates on some programs
- More equity upfront, which can be helpful if market conditions shift
The Real Answer: It Depends on You
Your ideal down payment depends on your financial goals—not a one-size-fits-all number. Some buyers prioritize keeping cash reserves, while others prefer the comfort of a smaller loan balance. The good news? You have options, and far more than most people think.