Beyond the 20% Myth: Low-Down-Payment Options That Actually Work
You don’t need 20% down to buy a home. Explore modern mortgage programs that make homeownership possible with a much smaller down payment.
Quick Facts: Low-Down-Payment Programs
-
3%
Conventional Loans
As low as 3% down with qualified credit
-
3.5%
FHA Loans
As low as 3.5% down with a lower credit score
-
0%
VA Loans
No down payment for eligible veterans and military members
-
0%
USDA Loans
No down payment in eligible rural and suburban areas
Compare the Programs
Each loan program has different requirements, benefits, and trade-offs. This table gives you a quick overview to see how they compare.
| Program | Minimum Down Payment | Best For | Things to Know |
|---|---|---|---|
| Conventional | As low as 3% | Buyers with good credit and stable income | Requirements vary by lender and program. PMI is usually required with less than 20% down. |
| FHA | 3.5% | First-time buyers or buyers with lower credit scores | More flexible credit and income guidelines. Requires mortgage insurance (MIP). |
| VA | 0% | Eligible veterans, active-duty service members, and surviving spouses | No down payment required. A funding fee may apply (waived for some borrowers). |
| USDA | 0% | Buyers in eligible rural and suburban areas | Income limits and property location requirements apply. |
| DPA (Assistance) | Varies by program | Qualified homebuyers needing help with down payment or closing costs | Not a loan type, but a program that provides assistance. Terms, eligibility, and benefits vary by program and location. |
Conventional Loans
As Low as 3% Down
3%
Conventional loans are a popular option for buyers with good credit and stable income. They offer flexibility and competitive rates.
- As low as 3% down
- Competitive interest rates
- PMI can be removed later (with sufficient equity)
FHA Loans
The 3.5% Down Standard
3.5%
FHA loans are insured by the Federal Housing Administration and designed to help more buyers qualify, especially first-time homebuyers.
- As low as 3.5% down
- More flexible credit guidelines
- Popular with first-time homebuyers
VA Loans
0% Down for Those Who Served
0%
VA loans help eligible veterans, active-duty service members, and surviving spouses achieve homeownership with no down payment required.
- No down payment required
- Competitive interest rates
- No monthly mortgage insurance (PMI)
USDA Loans
0% Down for Suburban & Rural Growth Areas
0%
USDA loans are backed by the U.S. Department of Agriculture and help low- to moderate-income buyers in eligible rural and suburban areas.
- No down payment required
- Competitive interest rates
- Helps make homeownership possible in eligible areas
Down Payment Assistance (DPA) Programs
Extra Support to Make Homeownership Possible
Down payment assistance programs can help cover your down payment and/or closing costs, making homeownership more accessible.
- Can reduce upfront cash needed
- May be available for first-time or repeat buyers
- Can be combined with certain loan programs
Choosing the Right Program
It Depends on Your Goals
The right loan program depends on your financial situation, long-term goals, and the total cost of homeownership. A trusted mortgage professional can help you compare options and find the best fit.
- Look at your total monthly payment
- Consider long-term goals
- Factor in credit score, income, and location
- Refinancing later may be an option
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