Twenty percent is not the universal entry fee for buying a home. In the United States, the minimum down payment can be as low as 0% for certain eligible government-backed loans and as low as 3% on some conventional mortgages. The amount you actually need depends on the loan program, your finances, the property, and lender rules.
A smaller down payment can help you buy sooner and keep more savings available for repairs or emergencies, while a larger one can reduce the amount you borrow and may lower mortgage-insurance costs. The right down payment percentage is the one that gets you into a sustainable mortgage without draining the cash you will still need after closing.
Minimum down payment by common loan type
Conventional loans: sometimes as little as 3%
Some conventional programs allow qualified buyers to put as little as 3% down. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs are examples of low-down-payment options, although eligibility rules apply. Other conventional loans may require 5% or more depending on factors such as occupancy, property type, credit profile, and underwriting results.
If you put less than 20% down on a conventional mortgage, private mortgage insurance, or PMI, is commonly required. That does not mean 20% is the minimum down payment; it simply means 20% is an important threshold because it can often eliminate PMI at the start of the loan.
FHA loans: generally 3.5% with qualifying credit
FHA-insured purchase loans generally allow a 3.5% minimum down payment for borrowers with a credit score of 580 or higher under FHA rules. Scores from 500 through 579 generally require at least 10% down. Individual lenders can apply stricter standards, so meeting FHA’s baseline does not guarantee approval.
FHA loans also include mortgage insurance premiums. Their insurance rules differ from conventional PMI, so compare the total monthly payment and long-term cost rather than focusing only on the smaller upfront down payment.
VA loans: potentially 0% down
Eligible veterans, service members, and certain surviving spouses may qualify for a VA-backed purchase loan with no down payment, provided program and lender requirements are met and the purchase price is not above the property’s appraised value in a way that requires additional cash. VA loans do not require monthly PMI or FHA-style mortgage insurance, though many borrowers pay a one-time VA funding fee unless exempt.
USDA loans: potentially 0% down in eligible areas
The USDA Single Family Housing Guaranteed Loan Program can provide 100% financing to qualifying low- and moderate-income buyers purchasing an eligible primary residence in an eligible rural area. Income, property, occupancy, and lender requirements still apply. Because eligibility is specific, a zero-down USDA loan should be viewed as a program option to check, not an assumption for every buyer outside a major city.
Jumbo and other specialty loans
Jumbo and specialty loans have no single minimum. Required down payments vary with loan size, reserves, credit strength, property type, and lender rules, so confirm the requirement before setting your savings target.
What different down payments look like in dollars
On a $400,000 home, 3% down equals $12,000, 3.5% equals $14,000, 5% equals $20,000, 10% equals $40,000, and 20% equals $80,000. Those figures show why waiting for 20% can dramatically extend the saving timeline for some households.
But the down payment is only one part of the decision. Moving from 3% to 10% on that same home reduces the starting loan amount by $28,000. Moving from 3% to 20% reduces it by $68,000. A lower balance generally means a lower principal-and-interest payment, but the exact monthly difference depends on your interest rate and loan terms. Mortgage insurance can widen or narrow the gap further.
Related planning topics include saving for a down payment, first-time homebuyer costs, and estimating cash to close.
Down payment is not the same as cash to close
One of the easiest mistakes is saving exactly the required down payment and assuming that is all you will need. Cash to close can also reflect closing costs, prepaid interest, homeowners insurance, initial escrow funding, taxes, credits, deposits already paid, and other transaction adjustments.
Consider a simple example. You buy a $400,000 home with 3% down, so the down payment is $12,000. Suppose your closing costs and prepaids total $10,000, you already paid a $3,000 earnest-money deposit, and you receive a $2,000 seller credit. In this simplified scenario, your remaining cash to close would be about $17,000. Your actual Closing Disclosure will provide the final figure.
Ask your lender for a Loan Estimate early, then update your savings target as the property, rate, insurance, taxes, and credits become known.
Should you put down more than the minimum?
Putting down more can make sense when it improves the monthly payment, reduces mortgage insurance, helps you qualify, and still leaves a healthy emergency reserve.
Putting down less can be reasonable when waiting would delay your purchase for years or when a larger down payment would leave too little for repairs, moving costs, and emergencies.
Instead of asking only, “What is the minimum down payment?” compare at least three versions of the same loan: the minimum allowed, a middle option such as 5% or 10%, and 20% if feasible. Ask the lender to show the interest rate, mortgage insurance, total monthly payment, estimated cash to close, and funds left in your savings after closing. That comparison turns a percentage into a real household decision.
FAQ
Do I need 20% down to buy a house?
No. Many buyers can qualify with less than 20% down, and eligible VA or USDA borrowers may qualify with no down payment. Twenty percent is mainly significant because it can reduce the loan balance and often avoids PMI on a conventional mortgage.
What is the lowest down payment for a conventional loan?
Some conventional programs allow as little as 3% down for eligible borrowers. The actual minimum can be higher based on the specific program, property, occupancy, credit profile, and lender requirements.
Can closing costs be included in the down payment?
No. The down payment and closing costs are separate parts of the transaction. Credits, assistance, deposits, or certain program rules may reduce what you personally bring to closing, but your lender should show the full calculation on the Loan Estimate and Closing Disclosure.
Is a bigger down payment always better?
Not necessarily. A bigger down payment reduces the amount borrowed, but using too much cash can leave you financially exposed after moving in. Compare monthly savings with the value of keeping an emergency fund and money for immediate home expenses.
Choose the minimum you can comfortably live with
The amount you need for a house can range from 0% for eligible VA or USDA borrowers to 3% on certain conventional programs, 3.5% on qualifying FHA loans, or substantially more for some properties and loan types. The best target is not automatically 20% and not automatically the smallest possible number. Build your plan around the full cash to close, the monthly payment, mortgage insurance, and the savings you will have left once the keys are yours.
