# How much down payment do you need?

> Down payment minimums by loan type, what 3%, 5%, 10% and 20% down cost on a median-value home, gift rules, assistance programs and the PMI trade-off.

URL: https://mortgage-math-us.com/buying/down-payment/  
Last reviewed: 2026-10-28 · By the MortgageMath US Editorial team

## Quick answer

The minimum down payment is 3% on some conventional loans, 3.5% on FHA loans with a credit score of 580 or higher, and 0% on VA and USDA loans for eligible buyers. On a $360,000 home — near the US median value — 5% down is $18,000, 10% is $36,000 and 20% is $72,000, the level at which a conventional loan needs no PMI. A bigger down payment lowers the monthly cost; a smaller one keeps more cash for closing costs and emergencies.

## Key facts

| Fact | Value | Source | As of |
|---|---|---|---|
| Conventional minimum (Fannie Mae and Freddie Mac programs) | 3% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |
| FHA minimum with a 580+ credit score | 3.5% | [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) | Oct 28, 2026 |
| VA minimum (price at or below appraised value) | 0% | [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/loan-types/purchase-loan/) | Jan 7, 2026 |
| USDA guaranteed loan minimum | 0% | [USDA Rural Development](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program) | Oct 28, 2026 |
| PMI ends automatically at this share of original value | 78% | [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) | Oct 28, 2026 |
| Penalty-free IRA withdrawal for a first home (lifetime) | $10,000 | [IRS Tax Topic 557](https://www.irs.gov/taxtopics/tc557) | Oct 26, 2026 |

## Minimum down payment by loan type

Every major loan program accepts less than 20% down. The catch is the cost that replaces the missing equity — PMI, FHA mortgage insurance or a one-time fee.

*Smallest down payment on a $360,000 home*

| Loan type | Minimum | Cash on $360,000 | Who qualifies and what it costs |
|---|---:|---:|---|
| Conventional | 3% | $10,800 | Up to 97% loan-to-value on a one-unit home you live in; PMI below 20% down |
| FHA | 3.5% | $12,600 | Score of 580+ (10% down from 500); upfront 1.75% plus annual MIP |
| VA | 0% | $0 | Eligible service members, veterans and some surviving spouses; funding fee of 2.15% on first use with under 5% down |
| USDA | 0% | $0 | Eligible rural areas, household income up to 115% of the area median; upfront fee of 1% |

The VA minimum applies when the price isn’t higher than the appraised value. FHA details, including how long its mortgage insurance lasts, are in our [FHA loans guide](https://mortgage-math-us.com/loan-types/fha-loans/).

## What each down payment costs every month

> **Worked example: $360,000 home, conventional 30-year fixed at the 7.24% weekly average**
>
> | Down payment | Cash down | Loan | Principal and interest | PMI | Total monthly |
> |---|---:|---:|---:|---:|---:|
> | 3% | $10,800 | $349,200 | $2,380 | $175 | $2,968 |
> | 5% | $18,000 | $342,000 | $2,331 | $171 | $2,916 |
> | 10% | $36,000 | $324,000 | $2,208 | $162 | $2,784 |
> | 20% | $72,000 | $288,000 | $1,963 | None | $2,377 |
> 
> Totals include property tax at the 0.89% national ratio and homeowners insurance at $4.90 per $1,000 of value. PMI uses the midpoint of Freddie Mac’s $30–$70 per $100,000 range for every row; in practice smaller down payments and lower credit scores sit toward the top of the range. Rates can also be better with more down.

Going from 10% to 20% down takes another $36,000 of cash and cuts the monthly cost by about $407. That saving comes partly from a smaller loan and partly from losing PMI, which would have ended on its own anyway.

## The PMI trade-off

PMI isn’t permanent on a conventional loan. It must end automatically once your balance is scheduled to reach 78% of the home’s original value, and you can ask to cancel it earlier, at 80%. Here is how long it would run on the same home if you only made scheduled payments:

*How long PMI lasts and what it costs in total, $360,000 home at 7.24%*

| Down payment | PMI a month | Ends automatically after | PMI paid by then |
|---|---:|---:|---:|
| 3% | $175 | 12 years, 10 months | $26,888 |
| 5% | $171 | 12 years, 1 month | $24,795 |
| 10% | $162 | 9 years, 10 months | $19,116 |

Extra principal payments or a rise in value can end it sooner — the [PMI guide](https://mortgage-math-us.com/buying/pmi/) shows how. Measured against the cash it lets you keep, PMI is often a reasonable price for buying sooner. It is a poor deal if it forces you into a loan you can only just afford.

## Where the down payment can come from

**Your own savings** are the simplest source. Lenders will ask where every large deposit came from, so keep money where it is once you start the process, or keep the paper trail.

**Gifts from family.** Fannie Mae accepts gifts from relatives, a fiancé or domestic partner, and some people with a long-standing family-like relationship — but never from the builder, agent or anyone else with an interest in the sale. The donor signs a letter stating the amount, that no repayment is expected, and their name, address, phone number and relationship to you. On a one-unit home you will live in, the entire down payment can be a gift. On a two- to four-unit home or a second home with less than 20% down, at least 5% must come from your own funds. FHA also allows documented gifts.

**Retirement savings.** A first-time buyer can take up to $10,000 from an IRA without the early-withdrawal penalty, although income tax may still apply. Weigh it carefully: that money stops growing for retirement.

**Down payment assistance.** State and local housing finance agencies offer grants, deferred loans and forgivable second mortgages. Fannie Mae’s Community Seconds rules allow a combined loan-to-value of up to 105% when a qualifying agency provides the second loan, and two low-down-payment programs serve lower-income buyers: Fannie Mae HomeReady (household income up to 80% of the area median) and Freddie Mac Home Possible (up to 80%). See [first-time buyer programs](https://mortgage-math-us.com/first-time-buyers/programs/) and [down-payment grants](https://mortgage-math-us.com/first-time-buyers/grants/).

> **Tip: Seller credits help with closing costs, not the down payment**
>
> A seller can agree to pay part of your closing costs, within limits each loan program sets, but the down payment itself must come from you, a gift or an approved program.

## How to choose your number

Start from cash, not from the percentage:

1. **Closing costs come first.** The CFPB puts them at 2%–5% of the price — $7,200 to $18,000 here — on top of the down payment. See [closing costs](https://mortgage-math-us.com/buying/closing-costs/).
2. **Keep reserves.** A new home brings repairs, moving costs and furniture. Lenders also like to see savings left after closing.
3. **Then compare the monthly cost.** Use the table above, or our [mortgage payment calculator](https://mortgage-math-us.com/tools/mortgage-payment-calculator/) with your own price and rate.
4. **Check the thresholds.** Down payments of 5%, 10% and 20% often move pricing, and 20% removes PMI. Ask your lender to quote both sides of a threshold you are close to.

If you are deciding how much you can afford in total, the [buying a home hub](https://mortgage-math-us.com/buying/) walks through the whole budget.

[Open the affordability calculator](https://mortgage-math-us.com/tools/affordability-calculator/)

## Frequently asked questions

### What is the minimum down payment for a house?

3% on some conventional loans, 3.5% on FHA loans with a 580+ credit score, and nothing on VA and USDA loans for eligible buyers. On a $360,000 home, 3% down is $10,800.

### Is it better to put 20% down?

It gives the lowest monthly payment and avoids PMI, but it isn’t always better. On a $360,000 home, going from 10% to 20% down takes another $36,000 of cash to save about $407 a month. If that would empty your savings, a smaller down payment is usually safer.

### Can my down payment be a gift?

Yes. Conventional and FHA loans accept documented gifts from family and certain close relationships. The donor signs a gift letter saying no repayment is expected, and the lender verifies the transfer.

### Does the down payment include closing costs?

No. Closing costs are separate and typically run 2%–5% of the price according to the CFPB. Your cash to close is the down payment plus closing costs, minus any credits and the earnest money you already paid.

### Can I use my IRA or 401(k) for a down payment?

A first-time buyer can withdraw up to $10,000 from an IRA without the early-withdrawal penalty, though income tax may still be due. 401(k) plans have their own rules on loans and withdrawals; ask your plan administrator.

### What happens if I put less than 20% down on a conventional loan?

You pay PMI, typically $30–$70 a month per $100,000 borrowed according to Freddie Mac. You can ask to cancel it when your balance reaches 80% of the original value, and it ends automatically at 78%.

## Sources

- [Freddie Mac Primary Mortgage Market Survey](https://www.freddiemac.com/pmms) — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25077?g=010XX00US) — Median value of owner-occupied homes (2024 ACS 1-year)
- [US Census Bureau, American Community Survey 2024 1-year](https://data.census.gov/table/ACSDT1Y2024.B25103?g=010XX00US) — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- [Freddie Mac Research](https://www.freddiemac.com/research/insight/homeowners-insurance-costs) — Average homeowners insurance premium per $1,000 of home value (2023 data)
- [Freddie Mac My Home](https://myhome.freddiemac.com/buying/breaking-down-pmi) — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- [CFPB](https://www.consumerfinance.gov/owning-a-home/prepare/figure-out-how-much-you-want-to-spend/) — Typical closing costs, low end (share of purchase price); Typical closing costs, high end (share of purchase price); Minimum down payment on some conventional loans (Oct 28, 2026)
- [HUD Mortgagee Letter 2026-11](https://www.hud.gov/sites/default/files/hudclips/documents/2026-11hsgml.pdf) — FHA minimum score for maximum financing; FHA minimum decision credit score (90% LTV cap from 500 to 579) (Oct 8, 2026)
- [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/loan-types/purchase-loan/) — VA purchase loan down payment (price at or below appraised value) (Jan 7, 2026)
- [Fannie Mae Eligibility Matrix](https://singlefamily.fanniemae.com/media/20786/display) — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- [HUD Mortgagee Letter 2023-05](https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf) — FHA upfront mortgage insurance premium (Feb 22, 2023)
- [U.S. Department of Veterans Affairs](https://www.va.gov/housing-assistance/home-loans/funding-fee-and-closing-costs/) — VA funding fee, first use, less than 5% down (Apr 7, 2023)
- [USDA Rural Development](https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program) — USDA guaranteed loan down payment; USDA guaranteed loan income limit (share of area median income) (Oct 28, 2026)
- [USDA Rural Development](https://www.rd.usda.gov/media/file/download/usda-rd-sfh-guarantee-loan-program-101-jan-2026.pdf) — USDA guaranteed loan upfront guarantee fee (FY2026)
- [CFPB](https://www.consumerfinance.gov/ask-cfpb/when-can-i-remove-private-mortgage-insurance-pmi-from-my-loan-en-202/) — PMI ends automatically at this share of original value; Ask your servicer to cancel PMI at this share of original value (Oct 28, 2026)
- [Fannie Mae Selling Guide B3-4.3-04](https://selling-guide.fanniemae.com/sel/b3-4.3-04/personal-gifts) — Fannie Mae: own funds required above 80% LTV on a two- to four-unit principal residence or second home (Feb 4, 2026)
- [IRS Tax Topic 557](https://www.irs.gov/taxtopics/tc557) — Penalty-free IRA withdrawal for a first home (lifetime limit) (Oct 26, 2026)
- [Fannie Mae Selling Guide B5-5.1-02](https://selling-guide.fanniemae.com/sel/b5-5.1-02/community-seconds-loan-eligibility) — Fannie Mae Community Seconds maximum combined LTV (May 3, 2023)
- [Fannie Mae Selling Guide B5-6-01](https://selling-guide.fanniemae.com/sel/b5-6-01/homeready-mortgage-loan-and-borrower-eligibility) — Fannie Mae HomeReady income limit (share of area median income) (Jun 4, 2025)
- [Freddie Mac Home Possible fact sheet](https://sf.freddiemac.com/docs/pdf/fact-sheet/home_possible_factsheet.pdf) — Freddie Mac Home Possible income limit (share of area median income) (Feb 1, 2026)
- [CFPB: What is private mortgage insurance?](https://www.consumerfinance.gov/ask-cfpb/what-is-private-mortgage-insurance-en-122/)

_General information, not financial advice._