How Much Down Payment Do You Actually Need?

Short answer: Many buyers put down far less than 20% — some conventional and government-backed programs allow as little as 3-3.5% down, and Down Payment Assistance programs can lower that even further for qualifying buyers.

Where the “20% rule” comes from

Putting 20% down avoids private mortgage insurance (PMI) on a conventional loan and generally gets you the best rate tier. But it’s a target for minimizing long-term cost, not a requirement to buy a home.

What buyers actually put down

• Conventional loans: as little as 3% down for qualifying first-time buyers
• FHA loans: as little as 3.5% down with a lower credit score threshold than conventional
• VA loans: 0% down for eligible veterans and active-duty service members
• Down Payment Assistance: grants or second-lien programs that can cover part or all of the down payment for qualifying buyers

The trade-off with a smaller down payment

Putting down less than 20% on a conventional loan typically means paying PMI until you build enough equity, and your monthly payment will be higher for a given purchase price. It’s a real trade-off, not a mistake — for many buyers, getting into a home sooner is worth more than waiting years to save 20%.

See what fits your situation

Talk to us about your specific down payment situation — we’ll walk through what you qualify for, including whether a Down Payment Assistance program makes sense for you.