Down payment requirements depend on the loan type, not a single rule
There is no single required down payment for a house. What you need to put down depends on which loan program you use: conventional mortgages, FHA loans, VA loans, and USDA loans all have different minimums. A conventional loan from a bank might require 3 to 20 percent down, while an FHA loan can go as low as 3.5 percent, and a VA loan may require zero down if you are a may have access to veteran. The lender you choose and the specific loan product they offer will determine your actual requirement.
Your down payment also affects what you pay over time. A smaller down payment means a larger loan amount, which means more interest paid across the life of the mortgage. It also usually triggers mortgage insurance — an extra monthly cost that protects the lender if you stop paying. Understanding what each loan type requires helps you figure out what you can actually afford to put down and what the real monthly cost will be.
Key Takeaways
- Conventional loans typically require 3 to 20 percent down, with 20 percent avoiding mortgage insurance entirely.
- FHA loans allow down payments as low as 3.5 percent and are designed for first-time buyers with lower credit scores.
- VA loans and USDA loans may require zero down payment if you meet the program's specific requirements.
- Down payments below 20 percent on conventional loans trigger private mortgage insurance, which adds to your monthly payment.
- Your credit score, debt-to-income ratio, and savings affect whether a lender will approve you at the down payment level you choose.
Conventional loans: 3 to 20 percent down
A conventional mortgage is a loan that is not backed by a government agency. These loans come from banks, credit unions, and mortgage companies. The down payment requirement varies by lender and loan product, but most conventional loans require between 3 and 20 percent down. Some lenders will go as low as 3 percent for borrowers with good credit and stable income; others require 5 or 10 percent as a baseline.
The 20 percent threshold matters because it is the point where you avoid private mortgage insurance (PMI). If you put down less than 20 percent, the lender requires you to pay PMI — typically 0.5 to 1.5 percent of the loan amount per year, added to your monthly mortgage payment. This insurance protects the lender, not you. Once you build enough equity in the home (usually 20 percent), you can request to have PMI removed, but you have to ask — it does not happen automatically.
FHA loans: 3.5 percent minimum down
An FHA loan is backed by the Federal Housing Administration and is designed to help people with lower credit scores or smaller down payments get into a home. The minimum down payment is 3.5 percent of the purchase price. FHA loans do require mortgage insurance, but it works differently than PMI on a conventional loan. You pay an upfront mortgage insurance premium (usually 1.75 percent of the loan amount) at closing, and then an annual mortgage insurance premium added to your monthly payment.
FHA mortgage insurance does not go away automatically when you reach 20 percent equity. If you put down less than 10 percent, the insurance stays for the life of the loan. If you put down 10 percent or more, you can have it removed after 11 years. FHA loans are popular with first-time buyers because the down payment is low and credit score requirements are more flexible, but the long-term mortgage insurance cost can be higher than a conventional loan.
VA loans: Zero down for may have access to veterans
If you are a current or former member of the military, a VA loan may allow you to buy a home with zero down payment. VA loans are may provide by the Department of Veterans Affairs and are available to veterans, active-duty service members, and some surviving spouses. There is no minimum down payment required, and there is no mortgage insurance at all — the VA may provide replaces it.
Instead of mortgage insurance, VA loans charge a one-time funding fee, typically 2.3 percent of the loan amount for first-time users (lower if you put money down, higher if you have a disability rating). This fee can be rolled into the loan or paid at closing. To use a VA loan, you need a Certificate of may be able to access from the VA, which you can request online through the VA website or through your lender.
USDA loans: Zero down for rural properties
A USDA loan is backed by the U.S. Department of Agriculture and is designed for people buying homes in rural areas. Like VA loans, USDA loans require zero down payment. You must meet income limits (which vary by county) and the property must be in an may be able to access rural area — the USDA website has a map tool to check if your target property qualifies.
USDA loans charge a may provide fee instead of mortgage insurance, typically 1 percent of the loan amount paid upfront and 0.35 percent annually. Like VA loans, the upfront fee can be rolled into the loan amount. USDA loans are slower to process than conventional loans because of the rural property verification step, so plan for a longer closing timeline.
What affects whether you can put down the minimum
Lenders do not approve every borrower at the minimum down payment. Your credit score, debt-to-income ratio, and savings history all factor into the decision. A credit score below 620 may disqualify you from conventional loans entirely; FHA loans typically accept scores as low as 500 to 580. Your debt-to-income ratio — the percentage of your monthly income that goes to debt payments — usually cannot exceed 43 to 50 percent, depending on the loan type.
Lenders also verify that you have the cash for the down payment and closing costs. They want to see that the money has been in your account for at least two months (to rule out borrowed funds). If you are borrowing the down payment from family, most lenders require a gift letter stating that the money does not need to be repaid. Some loan programs also require you to have cash reserves after closing — typically two to six months of mortgage payments in savings.
How down payment size affects your monthly payment
A smaller down payment means a larger loan, which means higher monthly payments and more interest paid over 30 years. On a $300,000 house with a 7 percent interest rate, putting down 3 percent ($9,000) instead of 20 percent ($60,000) increases your loan amount by $51,000. Over 30 years, that difference costs tens of thousands in additional interest, plus the cost of mortgage insurance for years.
However, a smaller down payment also means you keep more cash in your pocket for emergencies, repairs, or other needs. The trade-off is between lower upfront cash and higher long-term cost. Run the numbers with a mortgage calculator using your actual interest rate and loan terms to see the real difference for your situation.
Frequently Asked Questions
Can I use a gift from family for my down payment?
Yes, most lenders allow down payment gifts from family members. You will need a gift letter signed by the person giving you the money, stating the amount and that it does not need to be repaid. The lender will verify the gift funds are in your account before closing.
What happens if I put down less than 3 percent?
Most conventional loans require at least 3 percent down. Some lenders offer 1 to 2 percent programs, but they are rare and usually require excellent credit and income. FHA loans go as low as 3.5 percent. If you cannot save that much, VA and USDA loans may be your only zero-down options.
Can I remove mortgage insurance after I pay down the loan?
On conventional loans, you can request PMI removal once you reach 20 percent equity. On FHA loans, mortgage insurance stays for 11 years if you put down less than 10 percent, or for the life of the loan if you put down less than 10 percent. VA and USDA loans have no mortgage insurance to remove.
Do I need to pay closing costs on top of my down payment?
Yes. Closing costs typically run 2 to 5 percent of the purchase price and cover appraisal, title insurance, inspections, and lender fees. Some sellers will cover part of your closing costs as part of the purchase agreement, but you should plan to have both down payment and closing costs ready.
What if I have a low credit score but want to buy a house?
FHA loans accept credit scores as low as 500 to 580, depending on the lender, and allow 3.5 percent down. If you are a veteran or buying in a rural area, VA and USDA loans may also work. Expect to pay higher interest rates with a lower credit score, which increases your monthly payment.