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Down Payment Guide

Complete guide to saving for and using your down payment. Learn minimum requirements, PMI impact, and strategies to save faster or find down payment assistance.

Key figures

  • Typical down payment ranges: 3% (FHA/first-time), 5-10% (conventional), 15-20% (conventional preferred)
  • PMI cost: 0.46% to 1.50% annually on down payments under 20%
  • Down payment + closing costs + emergency fund needed: 5-30% of home price
  • Down payment assistance programs available in most states
  • Average down payment by first-time buyers: 5-7% nationally

Run your own numbers

Frequently asked questions

How much down payment do I need?

Minimum requirements vary: FHA loans (3.5%), conventional loans (5-20%), VA loans (0%). More down payment means less PMI and better loan terms.

Where can I get down payment funds?

Personal savings, gifts from family members, selling investments, using retirement funds (if eligible), or down payment assistance programs.

What's the advantage of putting down 20%?

You avoid PMI, get better interest rates, and build equity faster. PMI typically costs 0.46% to 1.50% annually.

Can I get a down payment gift?

Yes, gifts from family are allowed. Most lenders require a gift letter showing the money is truly a gift, not a loan.

Are there down payment assistance programs?

Yes, many states and programs offer down payment help to first-time buyers. Check with HUD and local housing agencies.

Your situation may differ

Tax outcomes depend on whether you itemize, your filing status, and local rules. These are estimates, not tax advice. A tax professional or lender can confirm the details for your situation.