Most buyers need far less than 20 percent down. Conventional loans allow as little as 3 percent, FHA allows 3.5 percent, and VA or eligible USDA buyers can put zero down. On a $350,000 home, that is the difference between $70,000 for the old 20 percent myth and as little as $10,500 through a conventional program. Here is what actually determines your real number.
The minimums by program
- Conventional: as little as 3 percent for qualified first-time buyers
- FHA: 3.5 percent with a credit score of 580 or above
- VA: zero percent for eligible veterans, service members, and surviving spouses
- USDA: zero percent in eligible areas for qualified household incomes
Gift funds can often cover some or all of it
Most loan programs allow down payment funds to come from a gift, typically from a family member, with proper documentation showing the funds are a genuine gift and not a loan that needs to be repaid. This is a commonly used and completely legitimate path for many first-time buyers.
A worked example
On a $350,000 home, a conventional loan at 3 percent down requires $10,500. FHA at 3.5 percent requires $12,250. A VA eligible buyer needs zero down. Beyond the down payment itself, closing costs typically add another 2 to 5 percent, so total cash needed at the table generally runs higher than the down payment figure alone, which is worth planning for from the start.
More down is not automatically better. It reduces your monthly payment and can remove mortgage insurance, but it also ties up cash that could serve as an emergency reserve or fund something else entirely. The right amount is a trade-off, not a fixed rule.
When putting more down actually makes sense
- You want to avoid mortgage insurance entirely by reaching 20 percent
- You want the lowest possible monthly payment and have ample reserves remaining after closing
- You are trying to keep your loan under the conforming limit to avoid jumbo financing
Common mistakes with down payment planning
- Assuming 20 percent is required. It is one option among several, not a universal requirement.
- Forgetting closing costs on top of the down payment. Total cash needed at closing is almost always higher than the down payment alone.
- Not documenting gift funds properly. Undocumented large deposits, even legitimate gifts, can create delays during underwriting if not handled correctly from the start.
Georgia considerations
Some Georgia counties and cities offer local down payment or closing cost assistance programs from time to time, with eligibility and funding availability that shifts year to year. Confirming what currently applies to a specific property and household is worth a direct conversation rather than relying on outdated information.
Frequently asked questions
On many programs, yes, especially FHA. Conventional loans sometimes require a portion of the down payment to come from your own funds depending on the loan to value ratio, so this is worth confirming for your specific scenario.
Not automatically. It depends on whether you would rather have a lower payment and less mortgage insurance, or keep more cash available for reserves, renovations, or other goals. Both are valid strategies depending on your priorities.
Yes. Closing costs typically add another 2 to 5 percent of the loan amount, and most loan programs also want to see some reserves remaining in your accounts after closing.
Want to know your real number instead of a rule of thumb? Send me your target price range and I will show you exactly what each program requires.
This article is general education, not a commitment to lend or an offer of credit. Program availability, terms, rates, and qualification guidelines vary by lender and are subject to change; all loans are subject to underwriting and final approval. Market figures are approximate and change over time. For guidance specific to your situation, reach out directly. Garrett Potz, NMLS #631592 · Affinity Home Lending, Company NMLS #1181151 · Equal Housing Lender.