What Kind Of Down Payment Do Home Buyers Need To Buy A House

Since 1934, You Haven't Needed 20% Down To Buy A Home

Video Transcript

A down payment is the amount of your own money that use to buy a house, and guess what — you don’t have to have twenty percent to put down.

There are some reasons why you might not want to.

You don’t need twenty percent down to buy a home. It wasn’t true in the 1930s when the government backed its first low-down payment loan, and it’s definitely not true today.

There are six government-backed mortgage loans that allow for low- or no-down payment and today’s buyers can choose from among the FHA loan which takes 3.5 percent down at minimum, the USDA loan which requires no down payment whatsoever, the VA loan for veterans which also allows 100 percent financing.

There’s the HomeReady and Home Possible programs which allow 3 percent down, and also the Conventional 97.

And there are good reasons why you might want to limit what you put down on your upcoming home purchase.

When you make a smaller down payment, can save for a home more quickly. Buy now instead of next year. And, you get to keep your cash in the bank and having cash available is important.

So, no matter how much or little you put down, five percent, three percent, no percent, we’ve got you covered.

Dan Green

Dan Green is a former mortgage loan officer and an industry expert. He's appeared on NPR and CNBC, and in The Wall Street Journal, Bloomberg, and dozens of local newspapers. Dan has helped millions of first-time home buyers get educated on mortgages, real estate, and personal finance. Have mortgage questions? Ask Dan in the chat.

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