The minimum down payment on a mortgage depends on the loan type. It can be 0% for VA and USDA loans, 3% for many conventional loans, and 3.5% for an FHA loan. The 20% figure is a common benchmark, not a rule. What catches most buyers off guard is the cash needed on top of the down payment, so this guide covers both.
TL;DR
- Conventional: many programs allow as little as 3% down, including Freddie Mac’s Home Possible and Fannie Mae’s HomeReady.
- FHA: 3.5% down with a 580 credit score or higher, or 10% down with a score from 500 to 579.
- VA and USDA: 0% down for eligible borrowers.
- Closing costs are separate. Budget roughly 2% to 5% of the purchase price on top of your down payment.
- The lowest down payment is not always the best deal. Compare the total monthly cost, including mortgage insurance, before you decide.
Table of Contents
- Minimum down payment by loan type
- What the minimum looks like in dollars
- Down payment vs. closing costs
- What a smaller down payment costs you
- How to choose your down payment
- Our perspective: look at the whole package
- Get a real number for your own situation
- FAQ
- Sources
Minimum down payment by loan type
Each loan program sets its own floor. Here is how the main options compare.
| Loan type | Minimum down payment | Who it fits |
|---|---|---|
| Conventional (Home Possible, HomeReady and similar) | 3% for eligible borrowers | Buyers with solid credit who want lower mortgage insurance costs |
| FHA | 3.5% with a 580+ score; 10% with a 500 to 579 score | Buyers with limited savings or a lower credit score |
| VA | 0% | Eligible Veterans, service members and surviving spouses |
| USDA Section 502 Guaranteed | 0% | Low-to-moderate-income households in eligible rural areas |
A lender can also set requirements above the program minimum, which are often called overlays. The numbers above are the program floors, and your own offer may differ. That is one reason to compare lenders rather than assume one quote is the market.
Conventional loans: as little as 3% down
Conventional loans are not backed by a government agency. Even so, Freddie Mac says its Home Possible program offers down payments as low as 3% with reduced private mortgage insurance (PMI). Fannie Mae’s HomeReady is built on the same idea.
The down payment doesn’t have to be entirely your own savings. Freddie Mac notes that it can come from several sources, including family and employer-assistance programs. Whether a particular gift or grant is allowed depends on the program and the lender, so ask before you count on it.
In most cases, the Consumer Financial Protection Bureau says you need at least 3% of your target home price. Many loan types and lenders ask for more.
FHA loans: 3.5% with a 580 score
FHA loans are insured by the Federal Housing Administration. Under HUD’s guidance, a borrower with a minimum credit score of 580 can put down 3.5%. With a score from 500 to 579, the minimum rises to 10%. Borrowers with scores below 500 are generally not eligible.
This is why FHA is often the first option we look at for buyers whose credit is still being rebuilt. You can read more on our FHA loans page.
VA loans: 0% down for eligible borrowers
VA-guaranteed loans are open to eligible Veterans, service members and surviving spouses. The VA states that the program generally doesn’t require a down payment. VA loans do not require private mortgage insurance, but they do carry a one-time funding fee.
There are two points worth knowing about that fee. Veterans with service-connected disabilities are exempt, and others can roll it into the loan instead of paying at closing. As of 2026, the VA also says borrowers can now deduct funding fees on their tax returns if they itemize. Ask a tax professional how that applies to your situation. If you have served, start with our VA loans page.
USDA loans: 0% down in eligible rural areas
USDA Section 502 Guaranteed loans serve low-to-moderate-income households buying in eligible rural areas. They also allow 0% down, according to the USDA’s guaranteed loan program page. In place of PMI, they charge a one-time upfront guarantee fee (currently 1%) and an annual fee (0.35%). Eligibility depends on both the property’s location and your household income, so check the address before you fall in love with a house.
What the minimum looks like in dollars
Percentages are abstract until you apply them to a price. Take a $400,000 home:
| Down payment | Amount | Loan amount |
|---|---|---|
| 0% (VA or USDA) | $0 | $400,000 |
| 3% (conventional) | $12,000 | $388,000 |
| 3.5% (FHA) | $14,000 | $386,000 |
| 5% | $20,000 | $380,000 |
| 10% | $40,000 | $360,000 |
| 20% | $80,000 | $320,000 |
The difference between 3% and 20% is $68,000 in cash. For many households that is the gap between buying this year and waiting several more years while prices and rents move.
Down payment vs. closing costs
These two are separate, and buyers often budget for only one. The down payment goes toward the purchase price and becomes equity in your home. Closing costs are what you pay to complete the loan and the sale. They include lender and third-party fees, prepaid items such as the first year of homeowner’s insurance, and the initial escrow deposits.
Based on the CFPB’s down payment guidance, a reasonable planning range for these costs is about 2% to 5% of the purchase price. On the $400,000 home, that is $8,000 to $20,000.
So with 3% down, your total cash to close could look like this:
- Down payment: $12,000
- Closing costs and prepaids (2% to 5%): $8,000 to $20,000
- Estimated total: $20,000 to $32,000
The CFPB suggests a simple method: subtract your estimated closing costs from the cash you have available. What remains is your maximum down payment. Your Loan Estimate shows your actual closing costs, and the Closing Disclosure arrives before closing. Check that the loan term, product and costs match your most recent Loan Estimate, and call your lender if they don’t.
Some buyers also keep part of their savings aside for an emergency fund and early repairs. A bigger down payment is not helpful if it leaves you with nothing for a broken water heater.
What a smaller down payment costs you
Putting less down is a trade, not a mistake. Here is what changes.
- A larger loan. You borrow more, so the monthly principal and interest payment rises.
- Mortgage insurance. A higher loan-to-value ratio generally means PMI on a conventional loan, or FHA and USDA fees. A 20% down payment eliminates the need for PMI on a conventional loan, as the CFPB’s guidance notes. VA loans skip PMI but have the funding fee.
- Less starting equity. You own a smaller share of the house on day one.
- Possibly a different rate. Lenders price risk in tiers, and the rate can shift as your down payment crosses a threshold.
On that last point, an intermediate percentage often earns no extra benefit over the tier below it. If you are close to a threshold such as 10% or 20%, it can make sense to save a little longer to reach it, or to look at a slightly less expensive home. Ask your lender to price both scenarios side by side.
The CFPB’s advice is to think of the mortgage as a complete financial package. That means weighing mortgage insurance, fees and the interest rate together, not just the upfront check.
Don’t forget the rate
A price reduction, a seller credit or a rate buydown can change your monthly cost as much as the down payment does. If you want to see how one common option works, this comparison of a 2-1 buydown and a price reduction is a useful read before you negotiate.
How to choose your down payment
Use these steps in order.
- Count your cash. Add up what you can use for the purchase, then set aside an emergency fund.
- Estimate closing costs. Use 2% to 5% of the price as a planning range, then replace it with your Loan Estimate figures.
- Subtract. What is left is your maximum down payment.
- Check program eligibility. Military service, property location, income and credit score all affect which minimums apply.
- Compare monthly payments. Look at the total payment, including insurance, at two or three down payment levels.
- Decide on comfort, not only on percentage. Pick the monthly payment you can carry calmly, not the smallest cash outlay on paper.
If you are still deciding whether to buy at all, our rent vs. buy calculator helps you compare the long-term costs.
Our perspective: look at the whole package
We talk with first-time buyers every week, and the same pattern comes up. They ask, “What is the least I can put down?” The better question is, “What down payment leaves me with a payment I’m comfortable with and cash in the bank?”
The lowest possible down payment can be exactly right. For a buyer with steady income and modest savings, 3% or 3.5% down may be what makes buying possible now. For a Veteran, 0% down with no PMI can be hard to beat. For someone who can comfortably reach 10% or 20%, a lower payment and no PMI may matter more.
What we try to prevent is the surprise. Buyers who plan only for the down payment can find themselves short at closing. That is why we run the numbers for cash to close first, then compare several loan types and lenders on total monthly cost. Our application is fully online, and our goal is to keep communication clear at every step so you know where you stand. Funding can happen in less than 21 days.
Your situation is your own. A short conversation about credit, savings and goals usually shows which option fits best.
— David Mordue
Get a real number for your own situation
If you are ready to see what you could qualify for, we compare rates across lenders and walk you through your down payment options for FHA, VA, conventional and other loans. Start your mortgage pre-approval and we will show you what your cash to close and monthly payment could look like.
FAQ
What is the minimum down payment to get a mortgage?
It depends on the program. VA and USDA loans can require 0% for eligible borrowers, many conventional loans allow 3%, and FHA loans require 3.5% with a 580 credit score. Lenders may set higher requirements than the program minimum.
Can I really buy a home with 3% down?
Yes, if you qualify for a program such as Home Possible or HomeReady. Freddie Mac and Fannie Mae offer these conventional options with reduced mortgage insurance for eligible borrowers. Income limits and other requirements can apply, so confirm eligibility with your lender.
Is the down payment the same as closing costs?
No. The down payment is your share of the purchase price. Closing costs are fees and prepaid expenses paid to complete the loan, commonly planned at 2% to 5% of the price. You need cash for both.
Does a lower credit score change the minimum down payment?
On an FHA loan, it does. A score of 580 or higher allows 3.5% down, while a score from 500 to 579 requires 10%. Conventional loans have their own credit score requirements, so compare programs if your score is borderline.
Can gift money be used for a down payment?
Often, yes. Freddie Mac says the funds can come from sources such as family and employer-assistance programs, and Fannie Mae’s HomeReady is also flexible on sources. Each lender will require documentation, so ask what paperwork they need before you transfer any money.
Sources
- Freddie Mac: 3% down payment with Home Possible
- Fannie Mae: HomeReady mortgage
- HUD Handbook 4000.1: FHA minimum down payment
- USDA Single Family Housing Guaranteed Loan Program
- VA News: Home loan borrowers can now deduct funding fees
- CFPB: Determine your down payment
- CFPB: Closing Disclosure explainer