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Do I need to put 20% down to buy a home? 

You don’t always need to put 20% down to buy a home. While a 20% down payment can help lower your monthly mortgage payment and avoid private mortgage insurance (PMI), many loan programs allow you to purchase a home with a lower down payment, sometimes as little as 3% or even 0% for qualified buyers. Read on to learn more about the most common loan programs and down payment requirements. 

Many people think you need a 20% down payment to buy a home, but that’s not actually a requirement for most loan programs. A 20% down payment can offer some advantages—like lower monthly payments and no private mortgage insurance (PMI)—but plenty of buyers qualify for a mortgage with much less.

The best down payment amount depends on your financial situation and the type of loan you choose. Here’s a closer look at some of the most common loan options:

Conventional Loans

  • Minimum down payment: Typically 3–5%

  • Best for: Buyers with good credit and steady income.

  • Key details:

    • Conventional loans are offered by private lenders and often backed by Fannie Mae or Freddie Mac.

    • If your down payment is less than 20%, you’ll likely pay private mortgage insurance (PMI), which can be removed later once you build equity.

    • This type of loan is a popular option for first-time and repeat buyers.

FHA Loans (Federal Housing Administration)

  • Minimum down payment: 3.5% (for qualified buyers)

  • Best for: Buyers who may have lower credit scores or less saved for a down payment.

  • Key details:

    • FHA loans are backed by the federal government, which makes them more flexible on credit and income requirements.

    • These loans require mortgage insurance, which is typically paid monthly.

    • FHA loans are often a good entry point for first-time homebuyers.

VA Loans (Department of Veterans Affairs)

  • Minimum down payment: 0% (for eligible veterans, active-duty service members, and some surviving spouses)

  • Best for: Eligible military borrowers.

  • Key details:

    • VA loans are backed by the Department of Veterans Affairs.

    • They don’t require PMI, which can make monthly payments more affordable.

    • Borrowers do need to meet service and eligibility requirements.

USDA Loans (U.S. Department of Agriculture)

  • Minimum down payment: 0% (for eligible rural and suburban areas)

  • Best for: Buyers looking in qualifying rural or suburban communities.

  • Key details:

    • USDA loans are designed to make homeownership more accessible in rural areas.

    • Income limits apply, and the home must be in an eligible location.

    • USDA loans have their own form of mortgage insurance, but with lower costs than many other programs.

Why some buyers still choose 20% down

Even though lower down payment options exist, some buyers choose to put 20% down because it can help them:

  • Lower their monthly mortgage payment.

  • Avoid private mortgage insurance.

  • Build equity faster.

  • Strengthen their offer in a competitive market.

But putting 20% down isn’t the only path to homeownership. Many people buy with less and refinance or remove PMI later as they build equity over time.

Every situation is different

Loan programs have their own qualifying requirements, including credit score, income, and debt-to-income ratios. That’s why it’s so important to talk with a trusted lender who can help you understand what options fit your financial goals.

Our partners at Gray Fox Mortgage are an excellent resource. They can walk you through different loan types, help you understand how much you’ll need for a down payment, and guide you through the qualifying process so you can buy your new home with confidence.