The down payment amount depends on the loan type and your lender, not a single rule

There is no single down payment requirement for buying a house. The amount you need ranges from 0% to 20% of the purchase price, depending on which loan program you use, your credit score, your debt-to-income ratio, and your lender's specific rules. A conventional loan typically requires 3% to 20% down. An FHA loan requires 3.5% down. A VA loan (for may be able to access military members) requires 0% down. A USDA loan (for rural properties) also requires 0% down.

The lower your down payment, the higher your monthly mortgage payment and the more interest you pay over the life of the loan—because you are borrowing more money. You will also pay private mortgage insurance (PMI) if your down payment is less than 20% on a conventional loan, which adds to your monthly cost until you build enough equity.

Key Takeaways

  • Conventional loans require 3% to 20% down; FHA loans require 3.5% down; VA and USDA loans require 0% down.
  • Down payments below 20% on conventional loans trigger PMI, which increases your monthly payment until you reach 20% equity.
  • Your credit score, debt-to-income ratio, and savings history affect both the down payment amount your lender will accept and the interest rate you receive.
  • The down payment is separate from closing costs, which typically run 2% to 5% of the purchase price and are due at signing.
  • Some programs allow you to gift down payment funds from family members, but lenders require documentation that the money is a gift, not a loan.

Conventional loans: 3% to 20% down

A conventional loan is a mortgage not backed by a government agency. Most conventional loans require a minimum down payment of 3%, though some lenders require 5% or more. If you put down less than 20%, you pay PMI on top of your principal, interest, and property taxes each month.

PMI protects the lender if you stop paying. The cost varies by lender and loan amount but typically runs 0.5% to 1.5% of your loan amount per year, divided into monthly payments. For example, on a $300,000 loan with 5% down ($15,000), your PMI might add $150 to $450 per month. You can remove PMI once you reach 20% equity in the home, either by paying down the principal or by requesting removal if your home value rises.

Conventional loans usually require a credit score of 620 or higher, though scores of 740 and above get better interest rates. Your debt-to-income ratio (total monthly debt payments divided by gross monthly income) must typically be 43% or lower, though some lenders go to 50%.

FHA loans: 3.5% down with mortgage insurance for the life of the loan

An FHA loan is backed by the Federal Housing Administration and requires only 3.5% down. The trade-off is that FHA loans require mortgage insurance premiums (MIP) that you pay for the entire life of the loan, not just until you reach 20% equity. This makes FHA loans more expensive over time than conventional loans, even though the down payment is lower.

FHA loans require a credit score of 580 or higher to may have access to for the 3.5% down payment. If your score is between 500 and 579, some lenders will approve you but require 10% down. Your debt-to-income ratio must be 43% or lower, though some lenders allow up to 50% with compensating factors (like a larger down payment or higher credit score).

FHA loans have limits on the loan amount, which vary by county. In 2024, the limit ranges from around $472,000 in lower-cost areas to over $1 million in high-cost areas. Check your county's limit with your lender or the HUD website before you start house hunting.

VA loans: 0% down for may be able to access military members

A VA loan is backed by the Department of Veterans Affairs and requires 0% down if you are an may be able to access service member, veteran, or surviving spouse. You do not pay PMI on a VA loan. Instead, you pay a VA funding fee (typically 1.4% to 3.6% of the loan amount), which can be rolled into the loan or paid upfront.

VA loans have no maximum loan amount in most cases, though some lenders set their own caps. Your debt-to-income ratio must typically be 41% or lower, though the VA allows up to 60% with strong compensating factors. You will need a Certificate of may be able to access (COE) from the VA, which you can request online through VA.gov or through your lender.

VA loans are assumable, meaning a future buyer can take over your loan at the same interest rate and terms. This is a significant advantage if interest rates rise after you buy.

USDA loans: 0% down for rural properties

A USDA loan is backed by the U.S. Department of Agriculture and requires 0% down for properties in may be able to access rural areas. Like VA loans, USDA loans do not require PMI. Instead, you pay an upfront may provide fee (1% of the loan amount) and an annual fee (0.35% of the loan amount), both rolled into the loan.

USDA loans are limited to properties outside city limits and suburbs, in areas designated as rural by the USDA. You can check whether a property qualifies on the USDA's website. Your household income must not exceed 115% of the area median income, though some counties allow up to 125%. Your debt-to-income ratio must be 41% or lower.

USDA loans typically require a credit score of 640 or higher, though some lenders go lower with compensating factors. The application process is longer than conventional loans because the USDA must verify the property location and your income.

Down payment versus closing costs: two separate expenses

Your down payment is not the only money you need at closing. Closing costs typically run 2% to 5% of the purchase price and cover appraisal fees, title insurance, attorney fees, property taxes, homeowners insurance, and lender fees. On a $300,000 home, closing costs might range from $6,000 to $15,000.

Some loan programs allow you to roll closing costs into the loan, which means you do not pay them upfront but pay interest on them over 15 or 30 years. Conventional loans sometimes allow this; FHA, VA, and USDA loans have specific rules about which costs can be financed. Ask your lender which costs you can roll in and which you must pay at closing.

Some sellers will pay part or all of your closing costs as part of the purchase negotiation. This is called a seller concession. The amount varies by loan type and local market conditions. Your real estate agent or lender can tell you what is typical in your area.

How to save for a down payment you cannot yet afford

If you do not have the down payment saved, you have several options. First, you can put down less and pay PMI or MIP until you build equity. This lets you buy sooner and build equity while you continue saving. Second, you can ask family members for a gift. Most lenders allow down payment gifts from relatives, but they require a signed gift letter stating the money is a gift, not a loan you must repay.

Third, you can look into down payment assistance programs run by your state, county, or city. These programs vary widely—some offer grants (money you do not repay), some offer low-interest loans, and some offer a combination. Search "[your state] down payment assistance" or contact your local housing authority to learn what is available in your area.

Fourth, you can delay buying until you save more. This is a valid choice, especially if interest rates are high or home prices are rising faster than your savings. Waiting gives you time to improve your credit score, pay down debt, and increase your down payment, all of which lower your monthly payment and total interest cost.

Frequently Asked Questions

Can I use a 401(k) or IRA to pay for a down payment?

Yes, but with penalties and tax consequences. You can withdraw from a traditional IRA penalty-free if you are a first-time homebuyer (defined as not owning a home in the past two years) and withdraw up to $10,000 lifetime. A 401(k) withdrawal is more complex and may trigger a 10% penalty plus income tax. Consult a tax professional before withdrawing, because the tax bill can be substantial.

What if I have bad credit but want to buy a house?

FHA loans accept credit scores as low as 580 with 3.5% down, or 500 to 579 with 10% down. Conventional loans typically require 620 or higher. If your score is below 580, focus on paying down debt and making on-time payments for six months to a year before applying. Each on-time payment raises your score.

Can the seller pay my down payment?

No, the seller cannot pay your down payment directly. However, the seller can offer a concession that reduces the purchase price, which effectively gives you more cash at closing. Alternatively, the seller can pay some or all of your closing costs, freeing up your cash for the down payment. Your lender will have limits on how much the seller can contribute.

Do I need to show proof that I saved the down payment myself?

Lenders typically require bank statements showing the down payment funds for two to three months before closing. This is called "seasoning" and proves the money is yours and not a loan. If you receive a gift, the lender requires a signed gift letter and proof the money came from the gift-giver's account.

What happens if I put down more than 20%?

Putting down more than 20% on a conventional loan eliminates PMI, which saves you money each month. It also lowers your loan amount and total interest paid over the life of the loan. However, it ties up more cash upfront. Whether to put down more depends on your other financial goals—if you have high-interest debt or no emergency fund, a smaller down payment may make sense.