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
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.
| 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.
What each down payment costs every month
$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:
| 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 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 and down-payment grants.
How to choose your number
Start from cash, not from the percentage:
- 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.
- Keep reserves. A new home brings repairs, moving costs and furniture. Lenders also like to see savings left after closing.
- Then compare the monthly cost. Use the table above, or our mortgage payment calculator with your own price and rate.
- 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 walks through the whole budget.
Open calculatorFrequently 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 — 30-year fixed rate, national weekly average (Week of Oct 29, 2026)
- US Census Bureau, American Community Survey 2024 1-year — Median value of owner-occupied homes (2024 ACS 1-year)
- US Census Bureau, American Community Survey 2024 1-year — Effective property tax rate (median taxes ÷ median home value) (2024 ACS 1-year)
- Freddie Mac Research — Average homeowners insurance premium per $1,000 of home value (2023 data)
- Freddie Mac My Home — Typical PMI cost, low end; Typical PMI cost, high end (Oct 28, 2026)
- CFPB — 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 — 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 — VA purchase loan down payment (price at or below appraised value) (Jan 7, 2026)
- Fannie Mae Eligibility Matrix — Fannie Mae maximum LTV, one-unit principal residence purchase (Apr 1, 2026)
- HUD Mortgagee Letter 2023-05 — FHA upfront mortgage insurance premium (Feb 22, 2023)
- U.S. Department of Veterans Affairs — VA funding fee, first use, less than 5% down (Apr 7, 2023)
- USDA Rural Development — USDA guaranteed loan down payment; USDA guaranteed loan income limit (share of area median income) (Oct 28, 2026)
- USDA Rural Development — USDA guaranteed loan upfront guarantee fee (FY2026)
- CFPB — 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 — 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 — Penalty-free IRA withdrawal for a first home (lifetime limit) (Oct 26, 2026)
- Fannie Mae Selling Guide B5-5.1-02 — Fannie Mae Community Seconds maximum combined LTV (May 3, 2023)
- Fannie Mae Selling Guide B5-6-01 — Fannie Mae HomeReady income limit (share of area median income) (Jun 4, 2025)
- Freddie Mac Home Possible fact sheet — Freddie Mac Home Possible income limit (share of area median income) (Feb 1, 2026)
- CFPB: What is private mortgage insurance?
Last reviewed Figures are checked against the sources above. Read our editorial policy. This page is general information, not financial advice — see the disclaimer.