📌 Key Takeaway: Despite the common '20% down' assumption, most first-time buyers put down far less: FHA requires just 3.5%, conventional loans can go as low as 3%, and VA and USDA loans require 0% down for eligible buyers.
Down Payment by Loan Type
| Loan Type | Minimum Down Payment |
|---|---|
| FHA | 3.5% |
| Conventional (HomeReady/Home Possible) | 3% |
| Standard Conventional | 5% |
| VA | 0% |
| USDA | 0% |
| Jumbo | 10-20% |
The Real Cost of Skipping 20% Down
Putting down less than 20% on a conventional loan means paying private mortgage insurance (PMI) until you reach 20% equity — but for many buyers, getting into a home years sooner is worth the PMI cost, especially in a market where home prices are rising faster than they could save.
Where Down Payment Money Can Come From
- Personal savings
- Gift funds from family (with a gift letter documenting it's not a loan)
- Down payment assistance programs (grants or forgivable loans)
- 401(k) loans or IRA withdrawals (with rules and tax implications to understand first)
This page is for educational purposes and isn't personalized financial or tax advice. Figures, rates, and program details change frequently — confirm current terms directly with lenders, tax professionals, or the IRS before acting.