Introduction
Many buyers believe they need 20% down to purchase a home, but that’s no longer the case. In reality, there are several down payment options available depending on the loan type, your credit, and whether you qualify for assistance programs. This step-by-step guide will walk you through the most common options.
Step 1: Conventional Loans (3–20% Down)
Conventional mortgages often allow as little as 3% down for qualified buyers. While 20% avoids private mortgage insurance (PMI), many buyers choose lower percentages to get into a home sooner. This ties directly to your budget. See how much home you can afford.
Step 2: FHA Loans (3.5% Down)
Backed by the Federal Housing Administration, FHA loans are popular with first-time buyers. They require a credit score of at least 580 for the 3.5% minimum. Your credit plays a big role in qualifying. Learn how to boost your credit before buying.
Step 3: VA Loans (0% Down)
For eligible veterans and active-duty service members, VA loans offer no down payment and no PMI, making them one of the best benefits available.
Step 4: USDA Loans (0% Down)
Designed for rural and suburban areas, USDA loans allow zero down for qualified buyers. These programs are income- and location-based.
Step 5: Down Payment Assistance Programs
Many states, counties, and cities offer down payment assistance or grants for first-time buyers. These can be paired with traditional loans to lower your upfront costs. If you are selling to buy, you’ll need to decide whether FSBO vs agent is best for you.
Final Thoughts
You don’t always need 20% down to buy a home. Whether you’re using conventional financing, FHA, VA, or USDA programs, there are plenty of down payment options to explore. Exploring down payment options is an important part of preparing to buy. Combine this with how much home you can afford, learn how to boost your credit before buying, and if you plan to sell first, compare FSBO vs agent to choose the right path.
Your questions, answered
Do I need 20% down to buy a house?
No, many loan programs allow as little as 3–5% down, and some offer zero down options.
What are the benefits of putting more money down?
A larger down payment lowers your monthly payment, reduces interest, and can eliminate private mortgage insurance (PMI).
Are there programs to help with a down payment?
Yes, many states and local governments offer down payment assistance programs for first-time buyers.
