How much should I put down on a house?

20% avoids PMI on conventional loans and meets the most lenient lender requirements. NAR's 2025 Profile of Home Buyers & Sellers reports the median first-time buyer puts down 8%; repeat buyers median is 19%. There is no "right" answer — it depends on opportunity cost of cash and PMI cost.

Do I really need 20% down?

No. Conventional 3% (HomeReady / Home Possible), FHA 3.5%, VA 0%, USDA 0% all exist. 20% is the threshold that avoids PMI and gives you better mortgage rates because of lower LTV — not a hard requirement. NAR data shows 86% of first-time buyers put down LESS than 20%.

What is the minimum down payment for an FHA loan?

3.5% with a 580+ FICO score. Between 500-579 FICO requires 10% down. FHA loans were created by Title II of the National Housing Act of 1934 to expand homeownership during the Great Depression — and the 3.5% threshold has been law since 2008.

Can I really get a house with 0 down?

Yes. VA loans (Servicemen's Readjustment Act of 1944, for eligible veterans) and USDA Rural Development loans (Housing Act of 1949 §502, for eligible rural properties) both allow 100% LTV — no down payment required. Both charge an upfront fee instead.

What is the VA funding fee?

A one-time fee paid to the VA to offset taxpayer cost of loan defaults. For first-time VA buyers with 0 down, the fee is 2.15% (active duty) or 2.40% (Reserves/Guard) as of 2026. Subsequent use raises to 3.3%. Disability-rated veterans are exempt.

What is the USDA upfront and annual fee?

USDA Section 502 Guaranteed Rural Housing Loan charges 1.00% upfront (rolled into loan) plus 0.35% annual fee. The Section 502 Direct Loan has no upfront fee but is income-restricted to "low-income" borrowers (below 80% AMI for Direct, 115% for Guaranteed).

Does a larger down payment lower my mortgage rate?

Yes. Fannie Mae and Freddie Mac's loan-level price adjustments (LLPAs) charge incremental fees by LTV band. A 95% LTV loan costs more than a 70% LTV loan with the same borrower. The difference is typically 0.25-0.75% in rate or 1-3% in upfront points.

Where can I find down payment assistance (DPA)?

State Housing Finance Agencies (HFAs) — CalHFA, NYHFA, OHFA, TSAHC, etc. — offer DPA grants and second-mortgage loans. HUD's Native American HEARTH and Section 184 program serves tribal members. Many MSAs also offer city/county DPA programs. Check HUD.gov DPA tool.

What is the difference between earnest money and down payment?

Earnest money is a deposit (typically 1-3% of price) submitted with your offer to show good faith. If the deal closes, earnest money credits to your down payment. If you back out for non-contingency reasons, the seller keeps it. Down payment is the full equity contribution at closing.

Can a gift fund my down payment?

Yes. Conventional, FHA, VA, USDA all permit gift funds from family. Lender requires a Gift Letter naming donor, relationship, amount, source, and confirming no repayment obligation. FHA also allows employer gifts and DPA grants. Bitcoin gifts must be liquidated to cash before closing.

How long does it take to save for a 20% down payment?

Use the months-to-save projection in this calculator. At $800/month saving with $15k start at 4.5% HYSA APY targeting $70k for a $350k home → about 60 months. Faster routes: bonus money, gifts, side income, employer DPA programs, or stepping down to 10% or 5%.

Should I put down more than 20%?

Diminishing returns. Above 20%, you save no PMI and only slightly better rates. The opportunity cost of cash that could be in retirement accounts (S&P 500 8-10% real return) usually exceeds the 6-7% mortgage rate savings. Most CFPs recommend 20% then redirect cash to 401k/IRA/HSA.

Conv 20/10/5/3 · FHA 3.5 · VA 0 · USDA 0

Down Payment Calculator

A down payment is the share of the home you pay in cash upfront — down = price × pct. The 20% conventional threshold avoids PMI; FHA 3.5% (National Housing Act 1934), VA 0% (GI Bill 1944) and USDA 0% (Housing Act 1949) each have their own upfront fees. NAR's 2025 Profile of Home Buyers reports the median first-time buyer puts down 8%.

$70000

Down (20.0%)

$280000

Loan amount

PMI required

58mo

To save

20% avoids PMI. Period.

Quick Conversion

FROM (Price ($))

TO (Down ($))70,000

pct

Formula: down = price × pct

House Equity Split — Down vs Loan

Down inputs

Label

Home price ($)

Down percent (slider)

20.0%

Savings plan

Saved $

$/mo

APY %

Months

to target

LTV

80%

at origination

Loan program presets

Home price → down required by program

Price	20%	10%	3.5%	0%
$150,000	$30000	$15000	$5250	$0
$200,000	$40000	$20000	$7000	$0
$250,000	$50000	$25000	$8750	$0
$300,000	$60000	$30000	$10500	$0
$400,000	$80000	$40000	$14000	$0
$500,000	$100000	$50000	$17500	$0
$650,000	$130000	$65000	$22750	$0
$800,000	$160000	$80000	$28000	$0
$1,000,000	$200000	$100000	$35000	$0
$1,500,000	$300000	$150000	$52500	$0

PMI breakdown? See PMI Calculator →

Formula

down = price × down_pctloan = price − downLTV = loan / price

Worked: $350k × 20% = $70k down. Loan $280k. LTV 80%, no PMI. Same home at FHA 3.5% → $12,250 down, $337,750 loan, MIP for life if LTV > 90%.

From FHA 1934 to USDA 2026: how the down payment shrank from 50% to 0%

In 2026, a National Guard veteran in rural Montana buys a $215k home with zero down via a VA loan and no PMI. Ninety years earlier, the same buyer would have needed 50% cash down on a 5-year balloon mortgage with no FHA backstop. The collapse of down-payment requirements over a century is the single biggest story in American homeownership — and this calculator covers every loan program that drives it today.

The Federal Housing Administration (FHA), created by Title II of the National Housing Act of 1934, was Franklin Roosevelt's New Deal answer to the Depression-era housing collapse. FHA introduced the 30-year fully-amortizing mortgage at 80% LTV (20% down). By 1957 the FHA threshold dropped to 90% (10% down). The modern 3.5% down minimum was set in 2008 amid the housing crisis.

The Servicemen's Readjustment Act of 1944 (the GI Bill) created the VA loan with a 0% down requirement for eligible veterans. The VA funding fee — currently 1.4-3.6% — was added in 1982 to offset taxpayer cost of defaults. Over 25 million VA loans have been guaranteed since 1944, including over 700,000 in 2024.

The Housing Act of 1949 §502 created the USDA Rural Development loan, originally for farm housing. Today USDA Section 502 Guaranteed covers any home in an eligible rural area (defined as population ≤ 35,000 per 2014 Agricultural Act). 0% down, 1% upfront fee, 0.35% annual fee. Section 502 Direct is even more generous but income-restricted.

The PMI Cancellation Act of 1998 (Homeowners Protection Act, 12 U.S.C. §4901-4910) made low-down conventional loans economically viable by guaranteeing PMI ends at 78% LTV. Combined with Fannie Mae HomeReady (2015) and Freddie Mac Home Possible (2014), the conventional minimum dropped to 3%. Today 86% of first-time buyers per NAR data put less than 20% down.

The IRC §168 27.5-year residential depreciation (Tax Reform Act 1986) is the parallel framework for investment property. While it does not affect owner-occupied down payment, it shapes the after-tax economics of rental purchases — making low-down VA and FHA financing strategies powerful for house-hackers (Schedule E rental of a duplex unit while occupying the other).

By 2026, the median first-time buyer per NAR Profile of Home Buyers & Sellers (2025 edition) puts down 8% — a far cry from the 20% "rule." State HFAs (CalHFA, NYHFA, OHFA, TSAHC) and HUD Native American programs offer additional DPA grants. The Federal Reserve Bank's 2025 Survey of Consumer Finances shows 32% of first-time buyers received gift funds from family — making the "all my own money" down payment increasingly the exception, not the rule.

How to use the down-payment calculator

Enter home price. Contract or comp value. Loan auto-adjusts as you change the slider.
Pick a program. Conventional 20% (no PMI), 10%, 5%, 3% (HomeReady), FHA 3.5%, VA 0%, USDA 0%.
Watch the house fill. Green equity rises from the foundation; reference lines at 20%, 10%, 3.5% LTV.
Project savings. Enter saved cash + monthly contribution + HYSA APY; tool computes months until you hit the target.
Compare program totals. The program grid shows each with upfront fee and PMI. VA funding fee, USDA guarantee fee included.

Down payment — frequently asked questions

Have more questions? Contact us

What lenders and home buyers say

4.9

Based on 5,360 reviews

“The house-fill visualization is the single best way I have seen to explain "equity" to first-time buyers. Combined with the loan program comparison grid, it answers 80% of my pre-tour conversations. The FHA 3.5% preset reflects current 2026 rates.”

Ngozichukwuka Ifeyinwa Okonkwo-Anuli

NAR-certified buyer's agent, urban first-timers

May 25, 2026

“The VA 0% down + funding fee correctly cites the Servicemen's Readjustment Act of 1944 and the 2.15% / 3.3% subsequent-use distinction. As a Marine vet myself I help fellow veterans understand 0-down — this tool teaches that in 60 seconds.”

Stanisław Bartłomiej Wojciechowski-Krawczyk

VA loan specialist, NMLS-licensed veteran

April 30, 2026

“The DPA FAQ correctly mentions state HFAs and HUD Section 184. I sent this link to our entire counseling team to use as the pre-meeting prep handout. Conventional 3% / FHA 3.5% / 0% comparison is exactly what borrowers need before they apply.”

Adaobi Chizoba Onuegbu-Okeke

HFA program officer, statewide DPA

March 25, 2026

“LLPA explanation in the FAQ accurately reflects Fannie/Freddie pricing tiers. Months-to-save projection at 4.5% APY matches what I tell clients about Marcus / Ally HYSAs. Excellent comparison engine for buyer education sessions.”

Aleksei Mikhailovich Sokolov-Volkov

Mortgage banker, retail residential

February 19, 2026

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