You may not need 20% down. Compare the specific program you qualify for, its full monthly cost and the cash you will still need at closing.
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Conventional, FHA, VA or USDA
Compare the payment and total interest
Fixed or adjustable
Ask which options fit your eligibility, property and budget.
1. Separate the mortgage from buyer assistance
A mortgage pays for the home with borrowed money. Down-payment assistance may help with upfront costs, often alongside a mortgage. They are different programs. Ask whether they can be combined and whether the assistance changes the interest rate or creates another loan.
2. Conventional: some options start at 3% down
Certain conventional programs allow eligible borrowers to put down 3%. Other conventional loans require more. With less than 20% down, private mortgage insurance is typically required. Ask which specific program you qualify for and how its income, property and buyer requirements apply.
3. FHA: as low as 3.5% down for eligible buyers
FHA loans are issued by private lenders and insured by the Federal Housing Administration. They can allow 3.5% down for eligible borrowers and require mortgage insurance. Credit and lender requirements can change the down payment you need. Request an FHA and a conventional quote if you qualify for both.
4. VA: zero down may be available
VA loans are for eligible veterans, service members and surviving spouses. Eligible purchases may not require a down payment, and VA loans do not require monthly mortgage insurance. A funding fee may apply unless you qualify for an exemption. Ask the lender to confirm eligibility, fee treatment and property requirements.
5. USDA: check both the borrower and the address
USDA offers eligible rural housing options that may allow zero down. Income and property-location requirements apply. Confirm the exact USDA program, eligibility and applicable upfront and ongoing fees. Do not assume a property qualifies because it looks rural.
6. State, local and nonprofit assistance
Assistance varies by location and program. Ask about income limits, price limits, homebuyer education, owner-occupancy requirements and current funding. Some help is a grant; other help is a second loan or has repayment or forgiveness conditions. Read what happens if you sell, refinance or move.
7. Calculate the entire cash requirement
Multiply the price by the required down-payment percentage, then add your loan and transaction costs. Apply only verified credits and deposits already paid. Keep moving money and emergency reserves separate. A zero-down mortgage can still have closing costs and other cash requirements.
8. Choose with written comparisons
Use the same price and purchase assumptions when comparing programs. Ask lenders for the payment, insurance, fees, cash to close and eligibility conditions. The smallest down payment does not necessarily produce the least expensive loan or the best household budget.
SEE THE NUMBERS
Example down payments on a $350,000 home
| Program or scenario | Down payment | What else to check |
|---|---|---|
| Eligible 3% conventional option | $10,500 | PMI and specific program eligibility |
| Eligible 3.5% FHA option | $12,250 | Mortgage insurance and lender requirements |
| Eligible zero-down VA option | $0 | Eligibility, possible funding fee and closing costs |
| Eligible zero-down USDA option | $0 | Income, address, program fees and closing costs |
| 20% down comparison | $70,000 | Cash left after closing and loan pricing |
Price × down-payment percentage. These are eligible-program examples, not guaranteed minimums or approval. Closing costs, fees, credits and reserves are separate; an actual transaction may require more down.
Key terms, in plain English
- PMI
- Private mortgage insurance, commonly required on conventional loans with less than 20% down.
- Assistance
- A separate program that may help with down-payment or closing costs.
- Owner occupied
- A home you will live in as your primary residence under the program’s rules.
- Lender requirements
- Additional qualification rules set by the lender.
Common mistakes to avoid
- Assuming every first-time buyer qualifies for every low-down-payment program.
- Treating assistance as free money before reading repayment terms.
- Choosing the smallest down payment without comparing the full cost.
Questions to ask
Bring these to your lender, agent or housing counselor, as appropriate.
- What is the name of the program you are quoting, and which rules apply to me?
- Can local assistance be combined with this loan?
- What are the full monthly payment and final cash-to-close estimate?
Common questions
Are FHA, VA and USDA only for first-time buyers?
These loan categories are not all restricted to first-time buyers. They each have their own eligibility rules. A separate assistance program may require first-time-buyer status.
Does a 3% down payment mean only 3% cash is needed?
No. The down payment is separate from closing costs and other expenses. Ask for the complete cash-to-close estimate.
How do I find local assistance?
Start with your state or local housing agency and a HUD-approved housing counselor. Ask for the program’s written terms, lender compatibility and funding status.
Your next steps
- Ask lenders which exact programs fit your situation.
- Check local assistance terms and whether funding is available.
- Compare monthly cost, cash to close and savings left after closing.
Sources and further reading
Official resources checked October 12, 2026. Loan and program rules can change. Confirm the requirements for your own purchase.
- CFPB: low-down-payment options ↗
- CFPB: conventional loans ↗
- CFPB: FHA loans ↗
- CFPB: VA, USDA and local programs ↗
Educational information and planning examples; not a loan offer or personalized financial advice.