Short answer: probably a lot less than you think. Most people assume they need 20% down. In reality, qualified buyers can purchase a home with as little as 0% to 3.5% down, depending on the loan program. On a $400,000 home, that’s the difference between saving $80,000 and saving $14,000 or less.
If you’ve been putting off homeownership because the 20% number felt impossible, this is worth reading.
Where did the “20% down” rule come from?
The 20% figure isn’t a requirement — it’s a threshold. When you put 20% down on a conventional loan, you typically avoid private mortgage insurance (PMI), which is a monthly cost added to protect the lender if you stop paying.
So 20% can lower your monthly payment, but it has never been the price of admission. Plenty of buyers reach the closing table with far less, and many choose to keep their savings rather than empty them into a down payment.
What are the actual down payment minimums by loan type?
Here’s what the major programs require in 2026:
- VA loans — 0% down. Available to eligible veterans, active-duty service members, and certain surviving spouses. This is an earned benefit, and it remains one of the most accessible paths to ownership with no down payment and no monthly mortgage insurance.
- USDA loans — 0% down. For homes in eligible rural and many suburban areas, with household income within program limits. A genuine zero-down option that a lot of buyers overlook because they assume “rural” means remote.
- FHA loans — 3.5% down. A common first-time buyer choice, with more flexible credit guidelines. On a $400,000 home, that’s $14,000.
- Conventional 97 — 3% down. Backed by Fannie Mae and Freddie Mac for qualified buyers. On a $400,000 home, that’s $12,000.
- Conventional (standard) — 5% and up. More room to structure the loan, and PMI drops off once you build enough equity.
The right program depends on your credit, income, location, and goals — not on a one-size-fits-all rule.
What about closing costs?
Your down payment isn’t the only cash you’ll need. Closing costs — things like appraisal, title, and lender fees — generally run 2% to 5% of the loan amount. The encouraging part: these can often be reduced through seller credits, lender credits, or down payment assistance programs, several of which exist across the states we serve.
This is exactly the kind of thing worth mapping out before you start house hunting, so there are no surprises later.
Does down payment assistance actually exist?
Yes. Many state and local programs offer grants or second loans to help cover the down payment and closing costs, often aimed at first-time buyers or buyers under certain income limits. Eligibility and availability vary by state and change over time, so the practical step is to have someone check what you qualify for where you’re buying.
Your Eureka moment
Here’s the shift most first-time buyers experience once they run the real numbers:
You thought you needed $80,000 to buy a $400,000 home. Depending on the program you qualify for, the actual figure could be closer to $12,000 to $14,000 — or even zero with a VA or USDA loan. That’s not a loophole. That’s just how the programs are designed, and most people simply never get them explained clearly.
That gap — between what you assumed and what’s actually true — is the moment homeownership stops being “someday” and becomes “let’s look at the numbers.”
What’s the next step?
The most useful thing you can do is find out which programs you actually qualify for, with your real numbers. No consultation fees, ever — we’ll walk it with you, explain every step in plain English, and explain it twice if you’d like.
Let’s talk: Reach out for a no-pressure conversation about your down payment options. We’ll show you the programs side by side so you can decide what fits.
Frequently Asked Questions
Do I really need 20% down to buy a house? No. Twenty percent down lets you avoid private mortgage insurance on a conventional loan, but it is not required. Qualified buyers can purchase with as little as 0% down (VA or USDA), 3% down (Conventional 97), or 3.5% down (FHA).
What is the lowest down payment available in 2026? For eligible borrowers, VA and USDA loans allow 0% down. Among programs requiring a down payment, FHA starts at 3.5% and Conventional 97 starts at 3%.
How much is a down payment on a $400,000 house? It depends on the program. At 3% it’s $12,000; at 3.5% it’s $14,000; at 5% it’s $20,000; at 20% it’s $80,000. VA and USDA loans may allow $0 down for eligible buyers.
What’s the difference between a down payment and closing costs? Your down payment goes toward the price of the home. Closing costs are separate fees — appraisal, title, and lender charges — that generally run 2% to 5% of the loan amount and can sometimes be offset with credits or assistance programs.
Can I get help with my down payment? Possibly. Many state and local down payment assistance programs offer grants or second loans, often for first-time buyers or those within income limits. Eligibility varies by state and changes over time, so it’s worth having a broker check your specific situation.