What we verified in “How much do you need for a down payment?”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB's 'Your home loan toolkit', a down payment is the amount you pay toward the home yourself and you borrow the rest; a down payment of 20% or more likely provides the best rates and most options, but think twice if it drains all your savings; with less, you probably pay higher interest rates or fees; PMI is insurance that lets you make a lower down payment because the lender is insured against loss if you fail to pay your mortgage; 'no PMI' or 'lender-paid PMI' offers do not mean they cost nothing; low down payment programs are typically more expensive because they could require mortgage insurance or come with a higher interest rate, so look at total fees, interest rate and monthly payment when comparing; and among programs to ask about it lists conventional loans with low down payment options, FHA with a 3.5% down payment program, VA with a zero down payment option for qualifying veterans and USDA with a similar program for eligible borrowers in rural areas.

   Sources 1 · Your home loan toolkit, section 1, step 4 'Choose the right down payment for you': 'A down payment is the amount you pay toward the home yourself'; 'A 20% or higher down payment likely provides the best rates and most options.'; 'However, think twice if the down payment drains all your savings.'; 'You probably have to pay higher interest rates or fees.'; 'because the lender is insured against loss if you fail to pay your mortgage'; 'that doesn’t mean they cost nothing'; 'Low down payment programs are typically more expensive because they could'; 'require mortgage insurance or come with a higher interest rate'; 'your total fees, interest rate, and monthly payment when comparing options'; 'Conventional loans that might offer low down payment options'; 'FHA, which offers a 3.5% down payment program'; 'VA, which offers a zero down payment option for qualifying veterans'; 'USDA, which offers a similar zero down payment program for eligible borrowers in rural areas' · Checked October 17, 2026

2. According to HUD Handbook 4000.1, an FHA borrower must make a Minimum Required Investment (the minimum down payment) of at least 3.5 percent of the property's Adjusted Value; with a credit score of 580 or higher the borrower is eligible for maximum financing; with a score from 500 to 579 the loan is limited to 90 percent of the value; and below 500 the borrower is not eligible.

   Sources 2 · Handbook 4000.1 (update issued August 12, 2026), II.A.2.a: 'must make a Minimum Required Investment (MRI) of at least 3.5 percent of the Adjusted Value'; II.A.1.b.ii: 'at or above 580 eligible for maximum financing'; 'between 500 and 579 limited to a maximum LTV of 90%'; 'The Borrower is not eligible for FHA-insured financing if the MDCS is less than 500' · Checked October 17, 2026

3. According to HUD Handbook 4000.1, the minimum down payment on an FHA loan may not come from the seller or any other person or entity that financially benefits from the transaction; the seller, agents, builder, lender and other interested parties may contribute up to 6 percent of the sales price toward your origination fees, other closing costs, prepaid items and discount points, but that contribution may not be used for your minimum down payment; the upfront mortgage insurance premium (UFMIP) must be entirely financed into the loan or paid entirely in cash; and FHA also charges an annual mortgage insurance premium that is payable monthly.

   Sources 2 · Handbook 4000.1, II.A.4.d, Source Requirements for the Borrower’s Minimum Required Investment: 'the funds for the Borrower’s MRI must not come from: (1) the seller of the Property'; 'any other person or entity who financially benefits from the transaction'; Interested Party Contributions: 'Interested Parties may contribute up to 6 percent of the sales price toward the Borrower’s origination fees, other closing costs, prepaid items, and Discount Points'; 'Interested Party Contributions may not be used for the Borrower’s MRI'; 'The UFMIP must be entirely financed into the Mortgage or paid entirely in cash'; II.A.2.e: 'The periodic MIP is an annual MIP that is payable monthly' · Checked October 17, 2026

4. According to HUD Handbook 4000.1, on an FHA loan a gift is a contribution of cash or equity with no expectation of repayment; it may come from a family member, your employer or labor union, a close friend with a clearly defined and documented interest in you, a charitable organization, or a governmental agency or public entity with a homeownership assistance program for low- or moderate-income families or first-time homebuyers; cash on hand is not an acceptable source of donor gift funds; the lender must get a gift letter signed and dated by the donor and by you, with the donor's name, address and telephone number, relationship to you, the dollar amount and a statement that no repayment is required; and it must document the transfer, for example with the donor's bank statement and proof of deposit into your account, or an electronic transfer.

   Sources 2 · Handbook 4000.1, II.A.4.d, Gifts (Personal and Equity) (TOTAL): 'Gifts refer to the contributions of cash or equity with no expectation of repayment'; 'the Borrower’s Family Member'; 'the Borrower’s employer or labor union'; 'a close friend with a clearly defined and documented interest in the Borrower'; 'a charitable organization'; 'a governmental agency or public entity that has a program providing homeownership assistance to'; 'Cash on Hand is not an acceptable source of donor gift funds'; 'a gift letter signed and dated by the donor and Borrower'; 'a statement that no repayment is required'; 'evidence of the electronic transfer of funds from the donor’s account to the Borrower’s account' · Checked October 17, 2026

5. According to HUD Handbook 4000.1, cash held outside a financial institution must be deposited in a financial institution or held by the escrow or title company; and the lender must get your explanation of how the funds were accumulated and how long it took, and decide whether that is reasonable given your income, spending, expenses and history of using financial institutions.

   Sources 2 · Handbook 4000.1, II.A.4.d, Cash on Hand (TOTAL): 'Cash on Hand refers to cash held by the Borrower outside of a financial institution'; 'is deposited in a financial institution or held by the escrow/title company'; 'describing how the funds were accumulated and the amount of time it took to accumulate the funds'; 'history of using financial institutions' · Checked October 17, 2026

6. Federal law prohibits structuring, or attempting to structure, transactions with financial institutions for the purpose of evading reporting requirements, for example by splitting cash deposits.

   Sources 3 · 31 U.S.C. §5324(a): 'for the purpose of evading the reporting requirements of section 5313(a)'; 'structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions' · Checked October 17, 2026

7. According to Fannie Mae, HomeReady is a conventional mortgage for borrowers who meet specific income criteria: the loan can reach a loan-to-value ratio of 95.01% to 97% (that is, a down payment from 3%) on purchases of a one-unit principal residence with a fixed rate of up to 30 years; and total annual qualifying income may not exceed 80% of the area median income (AMI) for the property's location.

   Sources 4 · Selling Guide B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility (06/04/2025): 'a conventional community lending mortgage that offers underwriting flexibilities to qualified borrowers who meet specific income criteria'; 'LTV, CLTV, or HCLTV Ratio 95.01 to 97%'; 'Purchase transactions or limited cash-out refinances only'; 'Fixed-rate loans with terms up to 30 years'; 'One-unit principal residence'; 'the total annual qualifying income may not exceed 80% of the AMI for the property’s location' · Checked October 17, 2026

8. According to Fannie Mae, the lender must obtain a primary mortgage insurance policy for a conventional first mortgage loan with a loan-to-value ratio greater than 80%; and on a purchase, the value used for that ratio is the lower of the sales price or the appraised value.

   Sources 5 · Selling Guide B7-1-01, Provision of Mortgage Insurance: 'the lender must obtain a primary mortgage insurance policy for a conventional first mortgage loan that has an LTV ratio greater than 80%'; 'the value used in determining the LTV ratio is the lower of the sales price or the appraised value of the security property' · Checked October 17, 2026

9. Under the Homeowners Protection Act, for a fixed-rate mortgage the 'cancellation date' is when, based on the initial amortization schedule, the balance is first scheduled to reach 80 percent of the property's original value, and the 'termination date' is when it is first scheduled to reach 78 percent.

   Sources 6 · 12 U.S.C. §4901(2) and (18): 'is first scheduled to reach 80 percent of the original value of the property securing the loan'; 'is first scheduled to reach 78 percent of the original value of the property securing the loan' · Checked October 17, 2026

10. Under the Homeowners Protection Act, private mortgage insurance is canceled on the cancellation date if you ask the servicer in writing and have a good payment history, among other requirements; and it terminates automatically on the termination date if on that date you are current on your payments.

    Sources 7 · 12 U.S.C. §4902(a) Borrower cancellation: 'submits a request in writing to the servicer that cancellation be initiated'; 'has a good payment history'; (b) Automatic termination: 'shall terminate with respect to payments for that mortgage insurance'; 'if, on that date, the mortgagor is current on the payments' · Checked October 17, 2026

11. According to HUD Mortgagee Letter 2023-05, the FHA upfront mortgage insurance premium (UFMIP) is 175 basis points (1.75%) of the base loan amount.

    Sources 8 · Mortgagee Letter 2023-05, Appendix 1.0, p. 2: 'All Mortgages: 175 Basis Points (bps) (1.75%) of the Base Loan Amount' · Checked October 17, 2026

12. According to the VA, for a VA-backed purchase loan you must qualify for a Certificate of Eligibility (COE) and live in the home you buy; and the loan often requires no down payment as long as the sales price is not higher than the home's appraised value, and no private mortgage insurance (PMI) or mortgage insurance premiums (MIP).

    Sources 9 · VA, Purchase loan: 'You qualify for a VA-backed home loan Certificate of Eligibility (COE)'; 'No down payment as long as the sales price isn’t higher than the home’s appraised value'; 'No need for private mortgage insurance (PMI) or mortgage insurance premiums (MIP)'; 'You will live in the home you’re buying with the loan' · Checked October 17, 2026

13. According to the VA, the funding fee is a one-time payment the Veteran, service member or survivor pays on a VA loan, because the program does not require down payments or monthly mortgage insurance; you pay it unless you meet certain requirements, for example if you receive VA compensation for a service-connected disability; and the amount may depend on your down payment.

    Sources 10 · VA funding fee and loan closing costs: 'The VA funding fee is a one-time payment that the Veteran, service member, or survivor pays on a VA-backed or VA direct home loan'; 'doesn’t require down payments or monthly mortgage insurance'; 'you’ll need to pay the VA funding fee unless you meet certain requirements'; 'You’re receiving VA compensation for a service-connected disability'; 'Your down payment amount' · Checked October 17, 2026

14. Under the USDA guaranteed loan regulation, the loan may not exceed the lesser of two amounts: the home's market value per the appraisal plus the upfront guarantee fee, or the purchase price plus eligible acquisition costs. In other words, it can cover the full price, with no down payment.

    Sources 11 · 7 CFR §3555.103, Maximum loan amount: 'The amount of the loan must not exceed the lesser of'; 'The market value of the property as determined by an appraisal that meets Agency requirements plus the amount of the up-front loan guarantee fee'; 'The total of the purchase price and all eligible acquisition costs' · Checked October 17, 2026

15. Under the USDA guaranteed loan regulation, at loan approval the household's adjusted income must not exceed the applicable moderate income limit; applicants must show they are U.S. citizens, U.S. non-citizen nationals or qualified aliens; and they must live in the home.

    Sources 12 · 7 CFR §3555.151, Eligibility requirements: 'the household's adjusted income must not exceed the applicable moderate income limit'; 'Applicants must provide evidence acceptable to the Agency of their status as United States citizens, U.S. non-citizen nationals, or qualified aliens'; 'Principal residence' · Checked October 17, 2026

16. Under the USDA guaranteed loan regulation, Rural Development only guarantees loans in areas it has designated as rural.

    Sources 13 · 7 CFR §3555.201(a): 'Rural Development will only guarantee loans made in rural areas designated as rural by Rural Development' · Checked October 17, 2026

17. According to HUD Mortgagee Letter 2025-09, FHA eliminated eligibility for non-permanent resident borrowers, for FHA case numbers assigned on or after May 25, 2025.

    Sources 14 · Mortgagee Letter 2025-09, Revisions to Residency Requirements: 'This ML removes the Non-permanent Residents sections in its entirety'; 'eliminating eligibility for non-permanent resident Borrowers'; 'must be implemented for FHA case numbers assigned on or after May 25, 2025' · Checked October 17, 2026

18. According to the CFPB, closing costs are the upfront costs you are charged to get your loan and transfer ownership of the property; the estimated cash to close on the Loan Estimate includes your down payment and closing costs, minus any deposit already paid to the seller, any amount the seller agreed to pay toward your closing costs and other adjustments; and you will need to give the lender proof of the source of those funds.

    Sources 15 · Loan Estimate Explainer: 'the upfront costs you will be charged to get your loan and transfer ownership of the property'; 'Is the Estimated Cash to Close what you were expecting?'; 'includes your down payment and closing costs, minus any deposit you have already paid to the seller, any amount the seller has agreed to pay toward your closing costs (seller credits), and other adjustments'; 'proof of the source of these funds' · Checked October 17, 2026

19. Freddie Mac says you should typically be prepared to pay between 2% and 5% of the home purchase price in closing costs.

    Sources 16 · What Are Closing Costs and How Much Will I Pay?: 'Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.' · Checked October 17, 2026

20. The CFPB recommends having, when you talk to lenders, your two most recent bank statements and proof of where your down payment comes from, with statements showing at least two months of history; and if part of the down payment is a gift, a signed statement from the giver saying it was a gift.

    Sources 17 · Owning a Home, Create a loan application packet: 'Bank statements, two most recent'; 'at least two months’ history of ownership'; 'get a signed statement from the giver stating that it was a gift' · Checked October 17, 2026

21. According to Fannie Mae, on a conventional loan for a principal residence or second home, a gift may fund all or part of the down payment, closing costs or reserves, and gifts are not allowed on an investment property; it may come from a relative (spouse, child or other dependent, or anyone related by blood, marriage, adoption or legal guardianship) or someone with a familial relationship, such as a domestic partner, a fiancé or a person with a long-standing familial-like or mentorship relationship; the donor may not be, or be affiliated with, the builder, the real estate agent or any other interested party; on a one-unit principal residence, all the funds can come from a gift; the gift letter, signed by the donor, states the amount, that no repayment is expected and the donor's name, address, telephone number and relationship; and the lender verifies the funds with, for example, the donor's check and your deposit slip, or an electronic transfer to your account or to the closing agent.

    Sources 18 · Selling Guide B3-4.3-04, Personal Gifts (02/04/2026): 'Gift funds may fund all or part of the down payment, closing costs, or financial reserves'; 'Gifts are not allowed on an investment property'; 'related to the borrower by blood, marriage, adoption, or legal guardianship'; 'an individual with a long-standing familial-like or mentorship relationship with the borrower'; 'The donor may not be, or have any affiliation with, the builder, the developer, the real estate agent, or any other interested party to the transaction'; 'All funds needed to complete the transaction can come from a gift'; 'specify the actual or the maximum dollar amount of the gift'; 'include the donor’s statement that no repayment is expected'; 'indicate the donor’s name, address, telephone number, and relationship to the borrower'; 'a copy of the donor’s check and the borrower’s deposit slip' · Checked October 17, 2026

22. According to Fannie Mae, on a loan for a principal residence you may use funds donated by acceptable entities (a grant) for all or part of the down payment, closing costs or reserves; those entities include federal agencies, states, counties and cities, housing finance agencies, 501(c)(3) nonprofits, Federal Home Loan Banks under their affordable housing programs and your employer, as long as they are not the seller or another interested party; and the grant letter must say that repayment is not expected.

    Sources 19 · Selling Guide B3-4.3-06, Grants and Lender Contributions: 'may use funds donated from acceptable entities for all or part of the down payment, closing costs, or financial reserves'; 'provided they are not the property seller or other interested party in the transaction'; 'a federal agency, state, county, or similar political subdivision of a state'; 'a nonprofit organization exempt from taxation under Section 501(c)(3) of the Internal Revenue Code'; 'an employer where the borrower is an employee'; 'repayment of the grant is not expected' · Checked October 17, 2026

23. According to the CFPB, many states and local organizations offer programs to help first-time buyers with a down payment or closing costs; to find them it suggests looking up a HUD-approved housing counseling agency in your area or calling the HOPE Hotline, 24 hours a day, seven days a week, at (888) 995-4673.

    Sources 20 · Where can I find information on programs for first-time home buyers? (last reviewed Sep 13, 2024): 'Many states and local organizations offer programs to help first-time buyers with a down payment or closing costs'; 'look up a HUD-approved housing counseling agency in your area'; 'HOPE™ Hotline, 24 hours a day, seven days a week, at (888) 995-HOPE (4673)' · Checked October 17, 2026

24. HUD publishes a page to look up FHA loan limits by state, county or metropolitan area; one-unit limits are set from the area's median price and fall between a national ceiling and a national floor.

    Sources 21 · FHA Mortgage Limits: 'This page allows you to look up the FHA or GSE mortgage limits for one or more areas, and list them by state, county, or Metropolitan Statistical Area'; 'between the national ceiling and floor values for the loan limits' · Checked October 17, 2026

25. HUD-approved housing counselors give independent advice on buying, renting, defaults and credit, often at little or no cost.

    Sources 22 · Find a Housing Counselor: 'approved by the U.S. Department of Housing and Urban Development (HUD)'; 'independent advice, often at little or no cost to you' · Checked October 17, 2026