# Down Payment Options for First-Time Buyers

By Chris Montgomery (@chrismontgomery) · Published 2026-10-28

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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.

#### Key Takeaways

-   Most first-time buyers do not need 20% down — 3% and 3.5% loans are common
-   FHA requires 3.5% down with a credit score of 580 or higher
-   VA and USDA loans offer 0% down for those who qualify
-   Down payment assistance can cover some or all of your cash requirement

## 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](https://www.amerisave.com/learn/fha-loan-down-payment-requirements-complete-guide-for-homebuyers)). 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](https://www.amerisave.com/learn/fha-loan-down-payment-requirements-complete-guide-for-homebuyers)).

![Conventional, FHA, VA and USDA minimum down payment comparison chart](https://convex.voce.com/api/storage/17310ba7-2727-4554-a188-98f9a369385a)

**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](https://themortgagereports.com/16976/97-mortgage-low-downpayment-3-mortgage-rates)). 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](https://themortgagereports.com/16976/97-mortgage-low-downpayment-3-mortgage-rates)).

## 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](https://www.amerisave.com/learn/fha-loan-down-payment-requirements-complete-guide-for-homebuyers)). **USDA loans** offer 0% down for buyers in eligible rural and suburban areas, subject to income limits and property location rules ([AmeriSave](https://www.amerisave.com/learn/fha-loan-down-payment-requirements-complete-guide-for-homebuyers)).

## 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](https://downpaymentresource.com/professional-resource/down-payment-assistance-continues-to-expand-in-q2-2026-reaching-2746-programs-nationwide)). 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.