The myth that you need 20% down to buy a home stops many people from even trying. The reality? You can buy a home with as little as 0-3% down. This guide explains your options and helps you decide how much to put down.
Minimum Down Payment by Loan Type
| Loan Type | Min Down | Min Credit | PMI/MIP |
|---|---|---|---|
| Conventional | 3% | 620 | Required if <20% |
| FHA | 3.5% | 580 | Required (MIP) |
| VA | 0% | No min | None |
| USDA | 0% | 640 | Small fee |
| Jumbo | 10-20% | 700+ | Varies |
The 20% Myth vs. Reality
20% Down Payment
- ✓ No PMI required
- ✓ Lower monthly payment
- ✓ More equity from day one
- ✗ Takes longer to save
- ✗ May miss market opportunities
- ✗ Less cash for emergencies
3-5% Down Payment
- ✓ Buy sooner
- ✓ Keep savings for emergencies
- ✓ Start building equity earlier
- ✗ PMI required
- ✗ Higher monthly payment
- ✗ Higher total interest
Down Payment Assistance Programs
Many programs exist to help with down payments, especially for first-time buyers:
State & Local Programs
Many states offer grants or low-interest loans for down payments. Check your state housing finance authority.
FHA Down Payment Grants
Some organizations offer grants that can be combined with FHA loans for down payment assistance.
Employer Programs
Some employers offer homebuyer assistance as part of their benefits package.
Good Neighbor Next Door
For teachers, firefighters, EMTs, and police officers — 50% off home price in revitalization areas.
Calculating Your Down Payment
Here's what different down payments look like on a $350,000 home:
| Down % | Amount | Loan | PMI |
|---|---|---|---|
| 3% | $10,500 | $339,500 | ~$280/mo |
| 5% | $17,500 | $332,500 | ~$240/mo |
| 10% | $35,000 | $315,000 | ~$160/mo |
| 15% | $52,500 | $297,500 | ~$80/mo |
| 20% | $70,000 | $280,000 | None |
Use our mortgage calculator to see how different down payments affect your monthly payment.
Down Payment Decision Checklist
- 1
Do you have 3-6 months of expenses saved beyond the down payment?
- 2
Will draining savings for 20% down leave you vulnerable?
- 3
Are home prices rising faster than you can save?
- 4
Do you qualify for any down payment assistance?
- 5
Can you comfortably afford the monthly payment with PMI?
Calculate your down payment scenarios