The biggest myth in homebuying is that you need 20% down to buy a house. First-time buyers routinely close with 3% or 3.5% down, and eligible veterans and rural buyers can put down zero. Your actual minimum depends on the loan type you choose — not some universal rule.
Here are the four main paths, from the smallest to the largest down payment.
What are the low down payment options?
FHA loans let you put down just 3.5% if your credit score is 580 or higher (AmeriSave). If your score sits between 500 and 579, the minimum jumps to 10%. Because the Federal Housing Administration insures these loans, lenders accept lower credit scores than they would for a conventional loan — which is why 82.64% of FHA purchase loans went to first-time buyers in fiscal year 2024 (AmeriSave).
Conventional 97 loans — backed by Fannie Mae — require just 3% down with a credit score of 620 or higher, no income limits, and you must be a first-time buyer (Mortgage Reports). On a $400,000 home, that is a $12,000 down payment instead of $80,000 at 20%. Programs like HomeReady and Home Possible also offer 3% down, though they cap your income at 80% of the area median (Mortgage Reports).
Who can buy with no money down?
Two programs drop the down payment to zero. VA loans are available to qualified veterans and active-duty service members, with no down payment and no mortgage insurance — for those who qualify, they are usually the strongest option (AmeriSave). USDA loans offer 0% down for buyers in eligible rural and suburban areas, subject to income limits and property location rules (AmeriSave).
How can down payment assistance help?
State and local programs can cover part or all of your cash requirement. There were 2,746 down payment assistance programs nationwide in Q2 2026, and 62% were available to first-time homebuyers (Down Payment Resource). Assistance often arrives as a second mortgage that is forgiven after you make your main loan payments on time.
Many programs are income-limited and require a homebuyer education course, so it pays to check what your state and locality offer. A quick conversation with a local loan officer — like me — can tell you which programs you qualify for and which loan type pairs best with them.
The bottom line
You do not need to wait until you have saved 20% to start looking. Match the right loan to your credit score and situation: FHA at 3.5% for lower scores, Conventional 97 at 3% with a 620 score, and zero down if you qualify for VA or USDA. Add down payment assistance and your upfront cash can shrink even further.
The smartest next step is getting pre-qualified so you know exactly what your down payment will be — before you start touring homes.
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