Most mortgages require a down payment, but the amount varies widely—and some programs let you buy with little or nothing down

A down payment is not legally required to buy a house in all cases, but most lenders will not give you a mortgage without one. The standard range is 3 to 20 percent of the home's purchase price, though some loan programs go lower. A few specialized programs—mainly VA loans for military members and USDA loans in rural areas—allow you to buy with zero down. The real question is not whether down payments exist, but which loan type matches your situation and how much cash you actually need to close.

The down payment amount affects your monthly payment, your interest rate, and whether you will pay mortgage insurance on top of your loan. A larger down payment means a smaller loan, lower monthly costs, and often a better interest rate. A smaller down payment means you keep more cash in your pocket now, but you pay more over time. Neither choice is automatically right—it depends on your financial position and what you plan to do with the money you do not put down.

Key Takeaways

  • Conventional mortgages typically require 3 to 20 percent down, but FHA loans allow as little as 3.5 percent, and VA and USDA loans may allow zero down.
  • If you put down less than 20 percent on a conventional loan, you will pay private mortgage insurance (PMI) until you reach 20 percent equity in the home.
  • Down payment information programs exist through state housing agencies, nonprofits, and some lenders, though they vary by location and income level.
  • Your down payment is separate from closing costs, which typically run 2 to 5 percent of the purchase price and are due at signing.
  • The loan type you may have access to for depends on your credit score, debt-to-income ratio, and sometimes your military status or location, not just your down payment size.

How down payment requirements differ by loan type

Conventional mortgages are loans sold to investors like Fannie Mae or Freddie Mac. Most require 3 to 5 percent down for a first-time buyer, though some lenders go as low as 3 percent. If you put down less than 20 percent, you pay private mortgage insurance (PMI)—an extra monthly fee that protects the lender if you stop paying. PMI typically costs 0.5 to 1 percent of your loan amount per year, split into monthly payments. You can stop paying PMI once you reach 20 percent equity in the home, either through payments or home appreciation.

FHA loans are backed by the Federal Housing Administration and are designed for buyers with lower credit scores or smaller down payments. The minimum down payment is 3.5 percent of the purchase price. Like conventional loans, FHA loans require mortgage insurance, but it works differently—you pay an upfront fee at closing (1.75 percent of the loan) plus an annual fee (0.55 to 0.8 percent, depending on your loan amount and down payment). FHA mortgage insurance does not go away after you reach 20 percent equity; it stays for the life of the loan if you put down less than 10 percent.

VA loans are available to military members, veterans, and some surviving spouses. They require zero down payment and no mortgage insurance. You do pay a one-time VA funding fee (1.4 to 3.6 percent of the loan, depending on your military branch and whether you have used a VA loan before), but this can be rolled into the loan itself. VA loans also typically come with better interest rates than conventional loans.

USDA loans are for buyers in rural areas who meet income limits. They also require zero down payment and no mortgage insurance. You pay a may provide fee upfront (1 percent of the loan) plus an annual fee (0.35 percent), both of which can be rolled into the loan. USDA loans are slower to process than other loan types because the property must be verified as rural.

What happens if you cannot save a down payment

If you do not have savings for a down payment, you have several paths forward. The first is to look for a loan program that requires less than you thought—FHA at 3.5 percent, or VA or USDA at zero if you are may be able to access. The second is to explore down payment information programs, which come from state housing finance agencies, local nonprofits, and some lenders themselves.

Down payment information programs work in different ways. Some give you a grant (money you do not repay), some offer a second loan at a lower rate, and some do both. may be able to access usually depends on your income (often capped at 80 to 120 percent of your area's median income), your credit score (usually 620 or higher), and sometimes your first-time buyer status. A few programs are open to repeat buyers or people buying in specific neighborhoods. The amount available varies—some cover the full down payment, others cover part of it, and some cap the grant at a fixed dollar amount.

To find programs in your area, start with your state housing finance agency (search "[your state] housing finance agency") or call 211 and ask for down payment information. Local nonprofits like NeighborWorks and community action agencies often run programs too. Some lenders advertise their own information programs, but these are usually smaller and come with strings attached—like a requirement to use that lender for your mortgage.

The difference between down payment and closing costs

Many people confuse down payment with closing costs, but they are separate. Your down payment is the money you give toward the purchase price. Closing costs are the fees you pay to process the loan and transfer the property—things like the appraisal, title search, title insurance, attorney fees, and lender fees. Closing costs typically run 2 to 5 percent of the purchase price and are due at signing, on top of your down payment.

If you are buying a $300,000 home with 5 percent down, you need $15,000 for the down payment plus another $6,000 to $15,000 for closing costs—roughly $21,000 to $30,000 total. Some loan programs let you roll closing costs into the loan or have the seller pay them, but this is not may provide. Ask your lender upfront what closing costs you will owe and whether any can be covered by the seller or rolled into the loan.

How your down payment affects your monthly payment and interest rate

A larger down payment lowers your monthly mortgage payment in two ways. First, you borrow less money, so the principal is smaller. Second, lenders typically offer better interest rates to borrowers who put down more, because the lender's risk is lower. The difference between a 3 percent down payment and a 20 percent down payment can be 0.25 to 0.5 percent in interest rate, which adds up over 30 years.

Here is a rough example: on a $300,000 home at 7 percent interest, a 3 percent down payment ($9,000) means you borrow $291,000, and your principal-and-interest payment is roughly $1,935 per month, plus PMI of about $145. A 20 percent down payment ($60,000) means you borrow $240,000, and your payment is roughly $1,595 per month with no PMI. The difference is $485 per month, or $5,820 per year. Over 30 years, that adds up—but you also had $51,000 more cash in your pocket when you bought.

Whether to put down more or less depends on what else you would do with that money. If you have high-interest debt, a low emergency fund, or other financial priorities, a smaller down payment may make sense. If you have stable income, low debt, and extra savings, a larger down payment can save you money over time.

Down payment information programs and where to find them

Most states run down payment information programs through their housing finance agencies. These programs vary by state—some are grant-based, some are forgivable loans (you do not repay them if you stay in the home for a set period), and some are second mortgages at favorable rates. Income limits, credit score requirements, and the amount of information available all differ.

Common state programs include HomeReady (Minnesota), Downpayment information Program (California), and the Homeownership information Fund (New York), but every state has something different. To find your state's program, search "[your state] down payment information" or contact your state housing finance agency directly. They can tell you what programs are currently open and whether you meet the basic requirements.

Nonprofits and community organizations also run information programs. NeighborWorks, the National Council of La Raza, and local community action agencies often have grants or low-interest loans. Some programs target first-time buyers, others target specific neighborhoods or income levels. A 211 call (dial 211 or visit 211.org) can connect you to local programs in your area.

A few lenders offer down payment information as part of their mortgage products, but read the terms carefully. Some require you to use that lender, some charge higher interest rates to offset the information, and some have restrictions on which properties you can buy. Compare the total cost of the loan, not just the down payment help.

Credit score and debt requirements that affect down payment options

Your credit score and debt-to-income ratio determine which loan programs you can access, which in turn affects your down payment options. Conventional mortgages typically require a credit score of 620 or higher, though most lenders prefer 640 or above. FHA loans allow scores as low as 500 to 580, depending on the lender. VA and USDA loans have no official minimum, but most lenders still want 580 or higher.

Your debt-to-income ratio is your total monthly debt payments divided by your gross monthly income. Most lenders want this to be 43 percent or lower, though some go up to 50 percent. If your ratio is too high, you may not may have access to for a larger loan, which means you need a larger down payment to bring the loan amount down. Paying off credit cards or other debts before you explore can improve both your score and your ratio.

If your credit score is below 620, you have limited options. Some lenders specialize in lower-score borrowers, but they charge higher interest rates and may require a larger down payment. Building your credit for a few months—by paying bills on time and lowering credit card balances—can open up better loan programs and lower down payment requirements.

Frequently Asked Questions

Can I buy a house with no money down?

Yes, if you are may be able to access for a VA loan (military members and veterans) or a USDA loan (rural areas, income limits explore). Conventional and FHA loans require at least 3 to 3.5 percent down. If you do not may have access to for VA or USDA, look for down payment information programs in your state—some cover the full down payment amount.

What is the minimum down payment I can put down?

For conventional mortgages, 3 percent is common, though some lenders go lower. FHA loans allow 3.5 percent. VA and USDA loans allow zero. The lower your down payment, the more you pay in mortgage insurance or fees over time, so compare the total cost across loan types.

Do I have to pay mortgage insurance if I put down less than 20 percent?

On conventional loans, yes—you pay private mortgage insurance (PMI) until you reach 20 percent equity. On FHA loans, you pay mortgage insurance for the life of the loan if you put down less than 10 percent. VA and USDA loans have no mortgage insurance. Ask your lender for the exact PMI cost before you commit.

Can the seller pay my down payment?

No, the seller cannot pay your down payment directly. However, the seller can contribute toward your closing costs, which frees up your cash for the down payment. Most lenders allow seller concessions of 3 to 6 percent of the purchase price. This is negotiated as part of the offer, not may provide.

How long does it take to save for a down payment?

That depends on your income and savings rate. If you save $500 per month, a 3 percent down payment on a $300,000 home ($9,000) takes 18 months. A 20 percent down payment ($60,000) takes 10 years. Down payment information programs can shorten this timeline significantly if you may have access to.