Down Payment Basics

A down payment isn’t just a number—it’s the beginning of your long-term financial plan. The right approach can help you protect your savings, qualify with confidence, and begin building equity over time (depending on market conditions and loan terms).

This guide breaks down the essentials so you can move forward with clarity and confidence.

If you’re unsure where to start, licensed mortgage professional like Anne King (NMLS #253976) and her team with Amres Corporation can walk you through how different down payment amounts affect your overall financial picture and long-term goals.

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A down payment is the upfront amount you contribute toward buying your home. Your lender finances the rest through your mortgage.

Your down payment gives you:

• a starting point for building equity
• a lower loan amount
• more stability in your long-term financial plan

It’s not just a requirement—it’s the first step in turning your housing payment into ownership.

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Minimum down payments vary by loan program:

• FHA loans — Minimum 3.5% down (for eligible borrowers who meet FHA criteria)**
• Conventional loans — As low as 3% down with certain qualifying programs (such as HomeReady or Home Possible, when eligible)**
• USDA loans — May offer 0% down in eligible rural or suburban areas for buyers who meet program requirements**
• VA loans — May offer 0% down for eligible veterans, service members, and some surviving spouses who meet VA guidelines**

**Examples only (not an offer). Minimum down payment and eligibility vary by program, borrower, property, and lender overlays. Mortgage insurance and other costs may apply.

These program types exist to help make responsible homeownership more accessible when eligibility requirements are met.

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There is no universal amount. The right down payment for you depends on:

• how much savings you want to keep
• the monthly payment you’re comfortable with
• your long-term financial goals
• whether you’ll use any assistance programs

Many loan programs allow minimum down payments in the 3%–5% range for eligible borrowers.

The goal isn’t to hit a perfect percentage—it’s to choose a down payment that supports long-term stability and equity-building without draining your savings.

If you’re comparing how different down payment amounts impact loan costs and monthly payments, Budgeting & Affordability explains how to build a payment plan that fits your financial comfort zone.

Your credit profile also plays a role in which down payment options may be available, which is why Credit Score & Mortgage Readiness is an important companion to this section.

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Down payment assistance (DPA) programs can help reduce upfront costs so you can buy sooner and keep more savings in reserve.

Assistance may come from:

• Statewide programs
• Local programs
• Federal tools (like the Mortgage Credit Certificate when eligible)

Down payment assistance is often provided as a second mortgage (sometimes with deferred payments and/or forgiveness provisions depending on the program). Terms vary and may include repayment triggers. 

Funding levels, eligibility requirements, and program rules can change, so it’s important to review the most current guidelines before planning your budget.

To explore grant options, incentives, and statewide assistance programs, continue to First-Time Buyer Programs & Grants.

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According to the National Association of REALTORS® (2024), the median down payment for first-time buyers was 9%, far below the commonly assumed 20%.

This reflects how modern loan programs help reduce barriers to homeownership when buyers qualify.

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Short answer: No. Most first-time buyers purchase with far less.

Here’s how 20% compares to lower down payments:

20% Down

• No monthly mortgage insurance
• Lower monthly payments
• Higher upfront cost

3%–5% Down

• Lower upfront cash requirement
• Mortgage insurance typically required
• Helps you maintain a stronger financial cushion for unexpected expenses and early homeownership costs

Waiting to save 20% can delay buying; in some cases, a smaller down payment may allow you to purchase sooner while keeping a financial cushion—depending on your budget, risk tolerance, and program eligibility.

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Here’s how to move forward with confidence:

1. Choose your down payment comfort range based on your budget and savings.
2. Review whether assistance programs may help based on your location, loan type, and income.
3. Connect with Anne King (NMLS #253976) or a licensed mortgage professional to review how different down payment amounts can support your broader financial goals and long-term stability. 

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 Continue Learning:
→ Next Topic: 📈 Credit Score & Mortgage Readiness
→ Return to the First-Time Homebuyer Blueprint 

Each guide builds on the last, helping you make informed decisions that support long-term stability and wealth through homeownership.

Continue learning with these other related topics:

🏁 Understanding the Mortgage Process 

Learn how lenders review your application and what to expect from pre-approval to closing.

💰 Down Payment Basics (You're Here)

Understand how much you really need—and how grants or assistance can help.

📈 Credit Score & Mortgage Readiness 

Build financial confidence and strengthen your credit profile before you buy.

📊 Budgeting & Affordability

Create a plan that aligns with your lifestyle and long-term goals.

🏠 First-Time Buyer Programs & Grants

Find programs that can reduce your upfront costs or make homeownership possible sooner.

📋 Loan Program Options

Compare FHA, Conventional, USDA, and VA loans to find your best fit.

🔑 Closing Costs & What to Expect

Prepare for the final stretch—understand what fees to expect and how to save.

👥 Working With the Right Team

Learn how to choose your lender, agent, and homebuying partners wisely.

📍 Home Search & Neighborhood Selection

Discover how to find homes and communities that fit your goals.

🚚 Moving From Renter to Owner

Transition smoothly from renting to owning your first home.

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National Association of REALTORS®. (2024, November 4). First-time home buyers shrink to historic low of 24% as buyer age hits record high. https://www.nar.realtor/newsroom/first-time-home-buyers-shrink-to-historic-low-of-24-as-buyer-age-hits-record-high 

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