Most buyers don’t put 20% down, and the real minimum depends on your loan program. Here’s what FHA, conventional, VA, and USDA loans actually require, plus when your down payment is due.
What a down payment is, and why 20% isn’t required
A down payment is the part of your home’s price you pay upfront in cash. Your loan covers the rest.
It exists for a simple reason: it lowers the lender’s risk and lowers what you borrow. The more you put down, the smaller your loan, and the less interest you pay over time. It’s also how you show a lender you’re financially ready for the home buying journey ahead.
Here’s where the confusion usually starts. Many buyers assume they need 20% down to qualify for a mortgage at all. That’s not true. The 20% figure isn’t a lending rule. It’s the amount that lets you skip private mortgage insurance (PMI) on a conventional loan. You can buy a home with far less down, and plenty of buyers do. According to NAR’s 2025 Profile of Home Buyers and Sellers, first-time buyers put down a median of 10% in 2025, the highest since 1989, while repeat buyers put down a median of 23%. Either way, neither is 20%.
Your down payment isn’t the only piece lenders look at. Credit score and income matter too, and together they shape which programs you qualify for and what your minimum actually looks like in practice.
What actually sets your minimum is the loan program you use, not a flat industry standard. As an independent broker, we shop your specific scenario across a network of investors, so the number you start with often isn’t the number you end up needing. Here’s what each program asks for.
Minimum down payment by loan program
Down payment minimums range from 0% to about 3.5%, depending on the program.
FHA loans: as low as 3.5% down
An FHA loan asks for as little as 3.5% down if your credit score is 580 or higher, per HUD’s minimum down payment guidelines. If your score falls between 500 and 579, expect a 10% minimum instead.
This program overlaps heavily with first-time buyers, since it’s built around a lower barrier to entry. If an FHA loan sounds like it fits your situation, our FHA loan page walks through eligibility and how the process works.
Conventional loans: as low as 3% down
A conventional loan can go as low as 3% down through specific first-time-buyer or income-qualified programs. Outside of those, most borrowers need at least 5% down, according to Bankrate.
Conventional loans also tend to carry stricter credit and income requirements than FHA once you’re at the lowest down payment tiers, since there’s no government backing behind them. Our conventional loan page breaks down what qualifies.
VA loans: 0% down for eligible veterans
VA loans usually require no down payment for eligible veterans, active-duty service members, and surviving spouses, while nearly 90% of all VA-backed home loans close with nothing down, per VA.gov. Instead of PMI, VA loans use a funding fee, which works differently and is explained on our VA loan page.
If you’ve served or you’re the surviving spouse of a veteran, this is usually the first program worth ruling in or out before anything else.
USDA loans: 0% down in eligible rural areas
A USDA loan also requires no down payment, financing up to 100% of the purchase through USDA’s guaranteed loan program, but it’s tied to where you’re buying and how much you earn. The property has to sit in a qualifying rural or suburban area, and your household income has to fall within the program’s limits.
Our USDA loan page has the details on which areas and income levels qualify.
When you actually pay your down payment
Your down payment is due at closing, not when your offer is accepted.
Closing doesn’t happen overnight. The average purchase loan takes a little over five weeks (about 37 to 38 days) from application to close, according to ICE Mortgage Technology’s data, and your down payment isn’t due until that day. That gap is where the loan gets underwritten, the home gets appraised, and the paperwork gets finalized.
Here’s the part that trips people up: the earnest money you paid when you made your offer isn’t a separate cost. Once you close, the money you placed in escrow is applied toward your down payment and other closing costs, per NAR’s own consumer guide, so you’re not paying it twice.
When the day comes, your down payment doesn’t go to the seller directly. It’s paid into an escrow account as part of closing, along with everything else that changes hands that day.
What PMI actually adds when you put down less than 20%
Putting down less than 20% on a conventional loan usually means paying private mortgage insurance until you build enough equity.
PMI protects your lender, not you, if a loan ever goes unpaid, according to Bankrate. It’s the tradeoff for buying with a smaller down payment instead of waiting years to save 20%.
The good news: PMI isn’t permanent. Once you’ve built about 20% equity in your home, either by paying down the loan or through appreciation, you can typically ask to have it removed.
VA and USDA loans don’t use PMI at all. VA loans charge a funding fee instead, and USDA loans use a guarantee fee. Different mechanism, same basic idea: it offsets the risk of a loan with little or nothing down.
Buying with a larger down payment: jumbo loans and second homes
Loan amounts above the standard conforming limit, and purchases of second homes or investment properties, typically need a larger down payment.
A jumbo loan covers homes priced above the conventional loan limit for your area, and lenders usually ask for a larger down payment to offset the bigger loan size. That limit changes from year to year, so talk to a loan officer about where it stands right now rather than relying on a number you saw somewhere else.
Second homes and investment properties follow a different rulebook too. Expect to put down somewhere between 10% and 25%, per Bankrate’s guide, higher than what you’d need for the home you actually live in.
How a broker helps you find the lowest down payment you qualify for
A broker who shops your scenario across multiple investors can sometimes find a lower minimum than a single bank’s own cutoff.
A single bank can only offer you its own products, with its own overlays layered on top of the baseline program minimums above. We work for you, not a single bank, so we’re comparing your file against a whole panel of lenders rather than a single bank book.
That matters because two lenders can look at the exact same borrower and land on two different numbers. An overlay one investor adds on top of the standard FHA or conventional minimum might not apply somewhere else in our network.
The fastest way to know where you actually land is to compare how a broker shops multiple lenders against going straight to a bank, or run your numbers through our mortgage calculator before you talk to anyone.
Find out what you qualify for
The programs above are starting points, not your actual number. Your credit, income, and the property you’re buying all shape what you qualify for, and the only way to know for sure is to run your specific scenario.
Tell us where you’re starting from, and a Milestone loan officer will walk you through what’s realistic for your situation, no pressure, no obligation.
