What is the Minimum Down Payment for a First-Time Home Buyer?
The minimum down payment for a first-time home buyer typically ranges from 0% to 3.5%, depending on the type of mortgage you qualify for. Many loan programs allow buyers to put down far less than the traditional 20%, and some eligible buyers may qualify for options that require no down payment at all.
A down payment is the amount of money you pay upfront when purchasing a home, with the remaining balance financed through a mortgage. While 20% is often cited as a benchmark, it isn’t required for many first-time buyers.
What is a down payment?
A down payment is the upfront amount a buyer contributes toward a home’s purchase price. The size of the down payment affects the loan amount, monthly mortgage payments, and whether mortgage insurance is required.
The type of loan a buyer uses also plays a major role in how much they need to put down. According to data from the National Association of Realtors, 52% of first-time buyers used a conventional loan, 29% used an FHA loan, and 9% used a VA loan. The share of first-time buyers using FHA loans declined from 55% in 2009 to 29% in 2024.
What is the minimum down payment for a first-time buyer?
The minimum down payment for a first-time buyer depends on the mortgage program used to finance the purchase. While a 20% down payment is often referenced, many commonly used loan programs allow buyers to put down much less. In practice, minimum down payments typically range from 0% to 3.5%, with requirements varying by loan type and borrower eligibility.
Minimum down payment by loan type
Minimum down payment requirements differ depending on the type of mortgage. The chart below compares common loan options used by first-time buyers, including typical credit expectations and example down payment amounts.
| Loan type | Minimum down payment | Credit Score | Down Payment Amount |
| FHA | 3.5% | Good | $15,750 |
| Conventional | 3% | Good | $13,500 |
| USDA | 0% | Good | 0 |
| VA | 0% | Excellent | 0 |
2025 loan lending standards for first-time buyers
Beyond down payment requirements, lenders also consider credit, income, and occupancy standards. While requirements vary by lender, the table below shows typical baseline standards for common loan types.
| Loan Type | Credit Score | Debt-to-Income Ratio | Income Employment | Occupancy | Mortgage Insurance | Loan Limits |
| FHA | 580 or higher | 43% or less | Borrowers need to show steady income and proof of employment, typically with at least two years of history. | FHA loans are designed for primary residences, meaning you must live in the property you purchase with the loan. | FHA loans require both an upfront and annual Mortgage Insurance Premium (MIP) | FHA loan limits vary based on location and the type of property |
| Conventional | 620 or higher | 36% or less | You generally need two years of stable income and employment. Lenders will verify this with financial documents. | The borrower is generally expected to live in the property as their primary residence for a minimum period, often 12 months. | If your down payment is less than 20%, you will need private mortgage insurance (PMI), which protects the lender. You can usually request PMI removal once you have 20% equity. | Conventional loans must adhere to conforming loan limits set by the FHFA |
| USDA | 620 or higher | 41% or less | Your household income cannot exceed 115% of the median household income for the area. | The home must be your primary residence. Investment properties or second homes are not allowed. | No Private Mortgage Insurance (PMI) | Instead, the maximum loan amount is determined by the borrower’s income, ability to repay, and the property’s appraised value. Instead, the maximum loan amount is determined by the borrower’s income, ability to repay, and the property’s appraised value. |
| VA | 620 or higher | 41% or less | no specific income limit for a VA loan, but borrowers must demonstrate a stable and reliable income. | The home must be your primary residence, meaning you intend to occupy it. | No Private Mortgage Insurance (PMI) | If you have full VA loan entitlement (meaning you haven’t used the benefit before, or you’ve paid off and sold a previously financed VA home), there are no official loan limits imposed by the VA. |
How minimum down payments compare in real dollars
To see how down payment requirements translate into actual costs, consider a first-time buyer purchasing a $450,000 home. Depending on the loan type, the required down payment could range from $0 to more than $15,000. Credit profile, income, and eligibility all factor into which loan options are available and how much cash is needed upfront.
Conventional loans
Conventional loans are the most common mortgage option for first-time buyers. While many people associate these loans with a 20% down payment, some conventional programs allow buyers to put down as little as 3%. These low-down-payment options are often designed for buyers with steady income and good credit, though private mortgage insurance is typically required until enough equity is built.
FHA loans
FHA loans are commonly used by buyers with reliable income but limited savings. According to the FHA’s 2024 Annual Report, more than 80% of FHA-insured home purchase mortgages were made to first-time buyers. FHA loans also play a significant role for underserved borrowers. Home Mortgage Disclosure Act data shows that a majority of Black and Hispanic borrowers and nearly half of rural borrowers who obtained low-down-payment mortgages did so through FHA programs.
USDA and VA loans
USDA and VA loans offer a key advantage for eligible first-time buyers by allowing purchases with no down payment. VA loans are available to qualifying active-duty service members, veterans, and surviving spouses and often come with competitive interest rates. USDA loans are designed for eligible rural and suburban properties and are available to qualified low- and moderate-income buyers. Both programs aim to reduce upfront costs for specific populations.
Smaller down payment vs. larger down payment
Pros of a smaller down payment
- More cash available for emergencies or other expenses
- Less time needed to save before buying
- Earlier entry into the housing market
Pros of a larger down payment
- Lower monthly mortgage payments
- Reduced total interest paid over time
- More immediate home equity
- Ability to avoid private mortgage insurance on conventional loans
- Potential access to better loan terms
Trade-offs of a low down payment
A lower down payment can make buying a home more accessible, but it often comes with trade-offs buyers should understand upfront. Putting less than 20% down may require mortgage insurance, which can increase monthly housing costs until sufficient equity is built. Smaller down payments can also result in higher monthly payments overall and less equity at the start of homeownership, which may limit financial flexibility if home values fluctuate or if you need to sell early.
How to lower your down payment as a first-time buyer
For many first-time buyers, saving for a down payment can be challenging. One option is to use loan programs designed for low or no down payments, such as VA and USDA loans, or FHA and certain conventional loans that allow down payments as low as 3% or 3.5%.
Buyers can also explore down payment assistance programs. Many state and local governments offer grants or low-interest loans that can help cover down payments and, in some cases, closing costs. Additional options may include gift funds from family members or seller concessions that reduce upfront expenses.
Frequently asked questions about first-time buyer down payments
What is the lowest down payment a first-time home buyer can make?
Some first-time buyers may qualify for mortgage programs that require no down payment, while others may need to put down 3% to 3.5% of the home’s purchase price. The minimum depends on the loan type, credit profile, income, and eligibility requirements.
Do first-time buyers need to put 20% down?
No. While a 20% down payment can help buyers avoid mortgage insurance and lower monthly costs, it is not required for many first-time buyers. Several loan programs are specifically designed to allow lower down payments.
Does a lower down payment increase monthly mortgage costs?
Often, yes. Smaller down payments can lead to higher monthly payments because of a larger loan balance and, in some cases, required mortgage insurance. Buyers should consider both upfront costs and long-term affordability when choosing a down payment amount.
The post What is the Minimum Down Payment for a First-Time Home Buyer? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.
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