Low Down Payment Mortgage Options

Are you a first-time homebuyer concerned about being able to put 20% down on a home loan? We’ve got good news for you. A 20% down payment isn’t required for many loan types, and putting down such a hefty amount is no longer the norm. In fact, the median national down payment was 13% in 2022, according to the National Association of REALTORS.®

Read on to get an at-a-glance view of some of the most common mortgages that require little or no money down if you qualify. Plus, get answers to frequently asked questions about low down payment home loans.

Mortgages that require little to no money down

FHA Loans

FHA Loans — As Low As 3.5% Down

Federal Housing Administration (FHA) loans are mortgages that are regulated and insured by the federal government. These loans make homeownership possible for borrowers with less-than-perfect credit and don’t require a large down payment.

FHA loan requirements:

  • 3.5% down
  • 580 credit score
  • Debt-to-income ratio below 45% (in most cases)
  • Two-year employment history
  • Buy a 1- to 4-unit primary residence
  • Loan amount within local FHA loan limits
Convential Loans

Conventional Loans — As Low As 3% Down

While a majority of buyers seeking conventional loans put 20% down, it isn’t mandatory. These loans can have down payments as low as 3% for qualified buyers. And if you need a little extra help with your down payment, some lenders offer additional mortgage grants that push your out-of-pocket even lower.

Conventional loan requirements:

  • 3% down
  • 620 credit score
  • Debt-to-income ratio below 43% (in most cases)
  • Two-year employment history
  • Loan amount within conforming loan limits
  • Buy a 1- to 4-unit property
VA Loans

VA Loans — As Low As 0% Down

A game-changing option for veterans, active service members and the spouses of fallen soldiers, loans from the U.S. Department of Veterans Affairs (VA) give many homebuyers the option of putting 0% down.

VA loan requirements:

  • Eligible military service
  • 0% down
  • 580–620 credit score
  • Debt-to-income ratio below 41%
  • Two-year employment history
  • Buy a 1- to 4-unit primary residence


  • Why would someone consider putting less than 20% down?

    The decision to purchase a home should revolve around personal needs, budget and affordability, lifestyle and family dynamics. Putting 20% down is not something that is possible for every buyer. There have been a multitude of products designed to help buyers obtain the dream of homeownership even if they are not able to save for a 20% down payment. FHA, VA, and Conventional loans offer down payments of as low as 0 (VA loan), 3.5% (FHA loan), and as low as 3% (Conventional).

  • Are there any downsides to low-down payment mortgages?

    The most common difference in lower down payment loan options is that mortgage insurance (MI) is included in the payment [except for VA loans] — this is not necessarily a bad thing, just something that needs to be planned and budgeted for. MI offers the lender some protection against loss in the event you default on the loan, but the good news is you can cancel the MI once you reach 20% equity in your home.

  • When and why should someone work with the MTH Mortgage team?

    I would highly encourage a prospective buyer to speak with an MTH Mortgage* loan consultant and get prequalified even if they are not looking to purchase for a year or longer. Our loan consultants can discuss projected payments, loan types, down payment options, and give the prospective buyer the knowledge that they need to property plan and prepare. By getting all the information early it will allow the prospective buyer the opportunity to save the funds needed for down payment so that they can get into the home they want while still maintaining a budget that they are comfortable with.