Down payment requirements can look simple until you start comparing loan programs.
Conventional loans can go as low as 3% down in eligible cases. FHA loans usually start at 3.5% down if your credit score is at least 580. VA and USDA loans can offer 100% financing to eligible borrowers. Jumbo loans tend to require more. But the minimum is only one part of the decision.
A larger down payment can reduce your monthly payment, change mortgage insurance or guarantee fees and give you more equity from day one. At the same time, putting every available dollar into the house can leave you short on reserves for closing costs, repairs and other expenses. The right amount depends on the loan you qualify for and how much cash you want to keep after closing.
Down Payment Requirements By Loan Type Basics
| Loan type |
Minimum down payment |
Zero-down available? |
Gift funds allowed? |
Mortgage insurance or program fee |
| Conventional |
As little as 3% on eligible loans. Many conventional scenarios require 5% or more. |
No standard zero-down first mortgage. |
Yes, subject to donor, occupancy and transaction rules. |
PMI is generally required when LTV is above 80%. Borrower-paid PMI can usually be removed later when applicable requirements are met. |
| FHA |
3.5% with a qualifying credit score of 580 or higher. A score from 500 to 579 generally means a 10% minimum down payment. |
No. |
Yes, from permitted sources and with required documentation. |
FHA mortgage insurance applies. The duration depends in part on the original LTV and loan term. |
| VA |
0% for many eligible borrowers when VA guaranty and appraisal requirements are met. |
Yes. |
Yes, if the donor is not an interested party to the transaction. |
No monthly mortgage insurance. A one-time VA funding fee generally applies unless the borrower is exempt. |
| USDA |
0% for eligible borrowers and eligible properties. |
Yes. |
Yes, with USDA documentation requirements. |
No PMI. USDA charges an upfront guarantee fee and an annual fee. |
| Jumbo |
Investor-set. A 10% to 20% down payment is common, although some programs allow less. |
Generally no. |
Depends on the lender or investor. |
Investor-specific. Some lower-down-payment jumbo loans use mortgage insurance or different pricing. |
| HELOC / home equity loan |
Not applicable. These loans are based on existing home equity. |
Not applicable. |
Not applicable. |
No purchase down payment. Lenders instead set CLTV and equity requirements. |
Which Mortgage Loans Allow Zero Down?
VA and USDA are the two major mortgage programs that can provide 100% financing on a home purchase. That means you may be able to finance the full eligible purchase price without making a traditional down payment.
A VA loan down payment can be 0% if you qualify for the VA home loan benefit and the loan meets VA and lender requirements. VA explains that the program does not generally require a down payment, although a lender can require one in some cases.
The appraisal matters. VA generally allows financing up to the home's reasonable value. If the purchase price is higher than the VA-established value and you still want to complete the purchase, you may need to pay the difference in cash. You can also run into a down payment requirement when you have only partial VA entitlement available and the guaranty does not provide enough coverage for the loan amount.
USDA's Single Family Housing Guaranteed Loan Program also provides 100% financing for eligible borrowers. USDA describes the program as offering no-down-payment financing to qualifying rural homebuyers. Unlike VA, USDA eligibility is based partly on household income and the location of the property. The home generally must be in a USDA-eligible area and used as your primary residence.
Zero down does not always mean zero cash at closing. You can still have closing costs, prepaid taxes and insurance and other expenses. Earnest money may also be due before closing, even though it can later be credited toward your required funds. Seller contributions, lender credits and eligible gift funds can sometimes reduce what you need to bring.
For borrowers who do not qualify for VA or USDA financing, there are still several low down payment loan options. Conventional and FHA loans can both allow a home purchase with less than 5% down in eligible scenarios.
Why A 20% Down Payment Still Matters
You do not need 20% down to get a mortgage, but 20% remains an important benchmark for conventional financing.
The biggest reason is private mortgage insurance. Conventional loans with an LTV above 80% generally require some form of mortgage insurance. If you make a 20% down payment on a purchase, your starting LTV is 80%, so borrower-paid PMI usually is not required.
If you put less than 20% down, PMI does not necessarily stay on the loan forever. The CFPB explains that many borrowers can request PMI cancellation when the principal balance is scheduled to reach 80% of the home's original value, assuming the other requirements are met. PMI generally must terminate automatically when the scheduled balance reaches 78% and the borrower is current, although some loans have different rules.
A larger down payment also lowers the amount you need to borrow. On a $400,000 home, putting 20% down instead of 5% means financing $60,000 less, which can lower the monthly payment and total interest cost.
Pricing can improve as your LTV falls, but there is no universal down payment that guarantees the best mortgage rate. Conventional pricing changes across multiple LTV bands, and the effect depends on credit score, loan purpose, occupancy and other factors. Sometimes it makes more sense to preserve cash or compare a larger down payment with mortgage points versus a down payment rather than automatically putting every available dollar into the house.
Twenty percent also is not a special mortgage-insurance threshold for every loan. FHA mortgage insurance follows FHA rules, not conventional PMI rules. VA loans do not have monthly mortgage insurance. USDA loans use guarantee fees instead of PMI. So the importance of 20% depends heavily on the loan program.
There is also a practical reason not to overdo the down payment. Cash left after closing can cover repairs, moving expenses and emergencies. Draining your accounts to hit an arbitrary percentage can leave you tight on cash right after buying.
Conventional Loan Down Payment Requirements
Some conventional loans allow down payments as low as 3%, but 3% is not the minimum for every conventional borrower or property.
Fannie Mae allows up to 97% LTV on certain fixed-rate purchase loans for a one-unit primary residence. For standard 97% LTV financing, at least one borrower generally must be a first-time homebuyer. Fannie Mae's HomeReady program can also reach 97% LTV for eligible borrowers. Freddie Mac has similar low-down-payment options, including HomeOne and Home Possible.
That is why you will often hear that conventional loans start at 3% down. In practice, many conventional loans require 5% or more. Second homes, investment properties, multiunit properties and some manually underwritten loans can require larger down payments.
Gift funds can also play a major role. Fannie Mae permits eligible gift funds for a principal residence or second home. For a one-unit primary residence, an eligible gift can generally cover all or part of the down payment and closing costs, subject to the applicable loan rules. Some transactions involving two- to four-unit homes or second homes can require a minimum contribution from the borrower's own funds when the LTV is above 80%.
Putting less than 20% down on a conventional loan usually means paying for mortgage insurance. That adds cost, but it can also let you buy without waiting until you have 20% saved. For some buyers, 3% or 5% down makes more sense than delaying a purchase solely to avoid PMI.
FHA Loan Down Payment Requirements
FHA down payment rules are closely tied to credit score.
Under FHA policy, borrowers with a Minimum Decision Credit Score of 580 or higher can qualify for maximum financing. On a standard FHA purchase, that means a maximum LTV of 96.5%, which works out to a 3.5% minimum required investment. Borrowers with a score from 500 through 579 are generally limited to 90% LTV, which means at least 10% down.
On a $300,000 purchase, 3.5% down is $10,500. A 10% down payment is $30,000. Closing costs are separate, although eligible credits or assistance may help cover some of them.
You can find the program details in the guide to the FHA minimum down payment.
FHA also allows eligible gift funds. Gifts can come from permitted sources such as certain family members, employers, labor unions, close friends with a documented interest in the borrower, charitable organizations and qualifying governmental entities. The gift must be documented and cannot be structured as money the borrower is expected to repay. The FHA gift funds rules explain the documentation and donor requirements in more detail.
FHA mortgage insurance works differently from conventional PMI. FHA loans generally have both an upfront mortgage insurance premium and an annual mortgage insurance premium. Putting 20% down does not automatically eliminate FHA mortgage insurance.
For many FHA loans with terms longer than 15 years, an original LTV above 90% means annual MIP lasts for the mortgage term. An original LTV of 90% or less generally means annual MIP lasts 11 years under the current structure. That makes 10% a more meaningful FHA threshold than 20% for MIP duration, although the exact premium and duration depend on the loan terms.
VA Loan Down Payment Requirements
VA loans are built around the ability to finance a home without a down payment.
If you are eligible for the VA home loan benefit, have sufficient entitlement and the purchase price does not exceed the home's reasonable value, VA generally does not require a down payment. VA states that purchase loans can finance up to 100% of the property value.
Cash can still be required in some VA transactions. If the purchase price exceeds the VA appraised value and you move forward, you may need to cover the difference. Partial entitlement can also create a down payment requirement if the remaining guaranty is not enough for the lender.
Making a voluntary down payment can still have benefits. VA does not charge monthly mortgage insurance, but many borrowers pay a one-time VA funding fee. VA's funding fee schedule uses lower purchase-loan fee rates when a nonexempt borrower puts at least 5% or at least 10% down. Borrowers who qualify for a funding fee exemption do not pay the fee regardless of down payment.
Gift funds are permitted under VA guidelines. The donor cannot be affiliated with the builder, developer, real estate agent or another interested party to the transaction, and the lender must document the gift and transfer. This can help with a required down payment, closing costs or other eligible funds to close.
The major advantage is that an eligible borrower may not need to save a traditional down payment before buying. You still need to budget for closing costs, prepaid expenses and any gap between the contract price and appraised value.
USDA Loan Down Payment Requirements
USDA guaranteed loans are another true zero-down mortgage option.
The Single Family Housing Guaranteed Loan Program can provide 100% financing to eligible borrowers buying an eligible property. There is no standard down payment requirement, which makes USDA one of the few major mortgage programs designed around no-down-payment financing.
USDA loans do have household income limits, and the property must generally be in a USDA-eligible area and used as your primary residence. The home does not have to be isolated or agricultural. Many small towns and areas outside major urban centers qualify.
USDA permits documented gift funds as an eligible source of funds to close. The donor cannot be an interested party such as the seller, builder or real estate agent, and the lender must document the gift and its transfer. USDA also recognizes other eligible asset sources, including certain savings, retirement assets, sales proceeds and earnest money.
USDA loans do not use conventional PMI. Instead, the program charges an upfront guarantee fee and an annual fee. The existence of those fees does not depend on whether your down payment is below 20%, so putting 20% down does not create the same insurance break that it does on a conventional loan.
You can still make a USDA down payment if you want to lower the loan amount. If you have enough cash to put 20% down, though, it is worth comparing USDA with conventional financing rather than assuming USDA is automatically the better fit.
Jumbo Loan Down Payment Requirements
Jumbo loans do not have a single national down payment requirement because they are not purchased under the standard conforming rules used by Fannie Mae and Freddie Mac.
Instead, the lender or investor sets the minimum. A 10% to 20% down payment is common in the jumbo market, although some programs allow 5% or 10% down for strong borrowers. Larger loan amounts, higher LTVs, second homes, investment properties and unique properties can push the required down payment higher.
Credit score and reserves tend to matter more as the loan amount and LTV increase. Strong credit, a low debt-to-income ratio and substantial post-closing reserves can sometimes support a lower down payment.
Gift funds can be allowed on some jumbo programs, but there is no agency rule that applies across the market. The investor decides whether gifts are acceptable, who can provide them and whether the borrower must contribute a minimum amount of personal funds.
Jumbo mortgage insurance is also investor-specific. Some high-LTV programs use mortgage insurance or different pricing, while others simply require more money down. The lowest available down payment is not always the cheapest option.
HELOC And Home Equity Loan Equity Requirements
A HELOC or home equity loan does not have a purchase down payment because you already own the property.
Instead, the lender looks at how much equity will remain after the new loan or credit line is added. That is usually expressed as a combined loan-to-value ratio, or CLTV. If your home is worth $400,000 and you owe $250,000 on your first mortgage, you have $150,000 in gross equity before accounting for the lender's CLTV limit and other underwriting requirements.
The higher the allowed CLTV, the more equity you may be able to access. Credit score, income, debt-to-income ratio, property type and lien position can all affect the maximum. There is no federal minimum equity requirement for every HELOC or home equity loan.
This is why these products do not fit neatly into a purchase down payment comparison. The closest equivalent to a down payment is the equity the lender requires you to leave in the property.
Where Can Your Down Payment Money Come From?
Your down payment does not always have to come entirely from money you saved in a checking or savings account.
Common acceptable sources can include your own savings, investment proceeds, proceeds from the sale of another property, eligible retirement funds, gift funds, grants, down payment assistance and, in some cases, borrowed funds secured by another asset. The exact list depends on the loan program and the transaction.
Gift funds are one of the most common alternatives. Conventional, FHA, VA and USDA loans all permit gifts in at least some situations, but each program has rules for who can give the money and how the transfer is documented. A gift is generally expected to be a true gift, not an undisclosed loan that you have to repay.
Your earnest money can also reduce the amount you need to bring at closing. Earnest money is usually paid after the seller accepts your offer and is later credited toward the funds due from you at settlement. It is not an extra down payment on top of what you already owe.
Down payment assistance can come as grants, forgivable loans or secondary financing. These programs have their own eligibility rules, and the first mortgage has to allow the assistance structure.
Seller concessions are different. They can help cover eligible closing costs, prepaid expenses or rate buydowns within program limits, but they generally cannot simply replace a required borrower down payment. On conventional loans, for example, Fannie Mae does not allow interested-party contributions to fund the borrower's down payment or minimum borrower contribution.
Documentation matters no matter where the money comes from. Lenders need to verify that the funds are available, come from an acceptable source and are not tied to undisclosed debt. Large last-minute deposits can create extra questions if the source is unclear.
How Much Should You Put Down On A House?
The minimum down payment tells you how little you may be allowed to put down. It does not tell you how much you should put down.
A larger down payment can lower your loan balance, reduce the monthly payment and, on a conventional loan, reduce or eliminate PMI. It can also make the loan easier to fit within certain underwriting or pricing limits.
A smaller down payment keeps more cash available for repairs, moving costs, emergency savings or reserves. Homeownership expenses do not stop once the down payment is made.
The right answer often comes down to comparing a few scenarios. Look at the monthly payment, mortgage insurance or program fees, cash due at closing and how much money you will still have afterward.
The Bottom Line
Down payment requirements depend on the mortgage you use. Eligible conventional loans can start at 3% down, FHA loans can start at 3.5%, and VA and USDA loans can offer zero-down financing to borrowers who meet their program requirements. Jumbo loans usually require more, while HELOCs and home equity loans are based on the equity you already have instead of a purchase down payment.
You also do not need to treat the minimum as a target. A larger down payment can lower your loan balance and reduce certain costs, but keeping cash after closing can be just as important. Compare the full payment, fees and cash-to-close requirement before deciding how much of your available money to put into the home.
Frequently Asked Questions
How Much Down Payment Do You Need To Buy A House?
It depends on the loan. Some conventional loans allow 3% down, FHA loans can allow 3.5% down with a qualifying credit score, and eligible VA and USDA borrowers may be able to buy with no down payment. Jumbo loan minimums are set by the lender or investor and are usually higher.
Do You Need 20% Down To Buy A House?
No. Twenty percent is not a general mortgage requirement. It is most important on conventional loans because starting at 80% LTV generally allows you to avoid borrower-paid PMI. Many buyers purchase with much less than 20% down.
Can You Buy A House With 3% Down?
Yes. Certain conventional loans allow up to 97% LTV, which means a 3% down payment. Eligibility depends on the specific product, property, occupancy, underwriting result and other requirements. FHA loans generally start at 3.5% rather than 3%.
Which Loans Allow No Down Payment?
VA and USDA are the two major no-down-payment mortgage programs. VA eligibility is tied to qualifying military service or other VA eligibility criteria. USDA eligibility depends partly on household income and the location of the property.
Is It Better To Put 20% Down?
Sometimes, but not always. On a conventional loan, 20% down can eliminate the need for PMI and reduce the amount you borrow. But it also uses more cash upfront. A smaller down payment may make more sense if preserving emergency savings or reserves is more important.
Does A Bigger Down Payment Get You A Lower Mortgage Rate?
It can. A larger down payment lowers your LTV, and mortgage pricing can improve at lower LTV levels. But there is no single down payment percentage that guarantees the best rate. Credit score, loan type, occupancy, loan purpose and market pricing also affect the rate and fees.
Can Gift Funds Cover The Entire Down Payment?
They can in some cases. For example, Fannie Mae allows an eligible gift to cover the full down payment on certain one-unit primary residence transactions. FHA, VA and USDA also permit eligible gift funds. The donor, property and documentation rules vary by program, and some conventional transactions require a borrower contribution from personal funds.
Does Earnest Money Count Toward Your Down Payment?
Earnest money is generally credited toward the amount you owe at closing once it has been properly documented. That can include part of your down payment or other cash-to-close amount. It is not usually an additional charge on top of the final amount due.
Can You Put More Than The Minimum Down?
Yes. A program's minimum down payment is just the lowest amount allowed for an eligible transaction. You can generally put more down if you want to reduce the loan amount, lower the payment or change mortgage-insurance or fee treatment.
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