How Much Down Payment Do You Need? Minimum Requirements by Loan Program
Understanding down payment requirements is one of the most important steps in the home buying process. Many first-time buyers assume they need 20% down to purchase a home, but that is simply not true. Multiple loan programs allow you to buy a home with as little as 0% to 3.5% down, making homeownership more accessible than ever. At Integrity Home Lending, we help borrowers across 13 states navigate down payment requirements and find the right loan program for their budget.
What Is a Down Payment?
A down payment is the upfront cash you pay toward the purchase price of a home. The remaining balance is covered by your mortgage loan. For example, if you buy a $300,000 home and put 10% down ($30,000), your mortgage loan amount would be $270,000. Your down payment requirements depend on the loan type, your credit score, and the lender you work with.
The size of your down payment affects several key factors including your monthly payment amount, interest rate, whether you pay mortgage insurance, and your total loan cost over time. A larger down payment means borrowing less, which translates to lower monthly payments and less interest paid over the life of the loan.
Down Payment Requirements by Loan Program
Different loan programs have different down payment requirements. Here is a detailed breakdown of the minimum down payment for each major loan type available in 2026.
Conventional Loans (Fannie Mae and Freddie Mac)
Conventional loans are the most common mortgage type in America. The minimum down payment for a conventional loan is 3% for fixed-rate mortgages through programs like HomeReady and Home Possible. These programs have income limits and may require homebuyer education courses. Adjustable-rate mortgages (ARMs) typically require at least 5% down. The key advantage of conventional loans is that you can eliminate private mortgage insurance once you reach 20% equity in your home.
FHA Loans
FHA loans are backed by the Federal Housing Administration and are popular with first-time homebuyers. The down payment requirements for FHA loans depend on your credit score. If your credit score is 580 or higher, you need just 3.5% down. If your score falls between 500 and 579, you need 10% down. FHA loans require both upfront and annual mortgage insurance premiums (MIP) regardless of your down payment size, which is an important cost to factor into your budget.
VA Loans
VA loans offer one of the best benefits available to eligible veterans, active-duty service members, and qualifying military spouses: zero down payment required. You can finance 100% of the home purchase price. VA loans do not require monthly mortgage insurance, though there is a one-time VA funding fee that can be rolled into the loan amount. This makes VA loans one of the most affordable paths to homeownership for those who qualify.
USDA Loans
USDA loans, backed by the U.S. Department of Agriculture, also require zero down payment. These loans are designed for buyers purchasing homes in eligible rural and suburban areas who meet certain income limits. Like VA loans, USDA loans charge an upfront and annual guarantee fee instead of traditional mortgage insurance. Many areas that qualify as USDA-eligible are closer to cities than you might expect.
Jumbo Loans
Jumbo loans exceed the conforming loan limits set by Fannie Mae and Freddie Mac (currently $766,550 in most areas for 2026). Because these loans carry more risk for lenders, down payment requirements are typically higher, usually ranging from 10% to 20% or more. Strong credit scores and significant cash reserves are generally required for jumbo loan approval.
DSCR Loans for Investors
If you are purchasing an investment property, DSCR (Debt Service Coverage Ratio) loans typically require 20% to 25% down. These loans qualify based on the property’s rental income rather than your personal income, making them ideal for real estate investors. Learn more about how to calculate DSCR for your rental property.
Private Mortgage Insurance (PMI) Explained
If you put less than 20% down on a conventional loan, your lender will require private mortgage insurance (PMI). PMI protects the lender in case you default on the loan. The cost typically ranges from 0.5% to 1.5% of your loan amount per year, added to your monthly payment. For a $300,000 loan, that means an extra $125 to $375 per month.
The good news is that PMI on conventional loans is not permanent. Once your loan balance reaches 80% of your home’s original value, you can request PMI removal. At 78%, your lender must automatically cancel it. FHA loans work differently since their mortgage insurance premiums typically last for the life of the loan unless you refinance into a conventional loan.
Down Payment Assistance Programs
Many state and local governments offer down payment assistance (DPA) programs to help first-time and low-to-moderate income buyers. These programs can provide grants, forgivable loans, or low-interest second mortgages to cover some or all of your down payment requirements. Common types of assistance include grants that do not need to be repaid, deferred-payment second mortgages, and matched savings programs.
Georgia, for example, offers the Georgia Dream Homeownership Program, which provides up to $10,000 in down payment assistance for qualifying buyers. Many of the 13 states where Integrity Home Lending is licensed have similar programs. Our loan officers can help you identify which assistance programs you may qualify for in your area.
How Much Should You Save?
When planning your down payment, remember that you will also need funds for closing costs, which typically range from 2% to 5% of the purchase price. You should also maintain an emergency fund with three to six months of living expenses after closing. Use our affordability calculator to determine how much house fits your budget based on your income, debts, and available down payment.
Here is a quick reference for down payment requirements on a $350,000 home:
- 0% down (VA/USDA): $0 down payment
- 3% down (Conventional): $10,500 down payment
- 3.5% down (FHA): $12,250 down payment
- 5% down (Conventional ARM): $17,500 down payment
- 10% down: $35,000 down payment
- 20% down: $70,000 down payment
5 Proven Tips for Saving Your Down Payment
1. Set a Specific Savings Goal
Determine which loan program you plan to use and calculate your exact down payment target. Having a specific number makes it easier to create a timeline and track your progress toward homeownership.
2. Automate Your Savings
Set up automatic transfers from your checking account to a dedicated down payment savings account each payday. Even small amounts add up quickly when saved consistently over 12 to 24 months.
3. Reduce High-Interest Debt First
Paying off credit cards and personal loans frees up monthly cash flow for saving. It also improves your credit score, which can help you qualify for better loan terms and lower down payment requirements.
4. Explore Gift Funds
Most loan programs allow family members to contribute gift funds toward your down payment. FHA, VA, and conventional loans all accept gift funds, though each has specific documentation requirements your lender will guide you through.
5. Look Into Employer Programs
Some employers offer housing assistance or homebuyer benefit programs. Check with your HR department to see if your company provides any down payment matching or assistance programs.
Common Down Payment Myths
Myth: You need 20% down to buy a home. Reality: Multiple loan programs allow 0% to 3.5% down. While 20% eliminates PMI on conventional loans, it is not a requirement to purchase a home.
Myth: Down payment assistance is only for low-income buyers. Reality: Many DPA programs have income limits that extend well into moderate-income ranges. Some programs are available to buyers earning up to 150% of the area median income.
Myth: A larger down payment always means a better deal. Reality: While putting more down reduces your loan amount, it may not always be the best financial strategy. Keeping cash reserves for emergencies, investments, or home improvements can sometimes be more valuable than maximizing your down payment.
Get Started With Integrity Home Lending
Understanding your down payment requirements is the first step toward homeownership. Whether you qualify for a zero-down VA or USDA loan, or you are saving for a conventional or FHA purchase, our team at Integrity Home Lending is here to help. We serve borrowers in Alabama, Alaska, Colorado, Florida, Georgia, Maryland, Mississippi, New Jersey, North Carolina, Pennsylvania, South Carolina, Tennessee, and Virginia.
Get pre-qualified today to find out exactly how much you need for your down payment, or contact our team with any questions about down payment requirements for your specific situation.
