You may not need 20% down. Program minimums range from zero for eligible VA borrowers to 20–25% or more for investment and Non-QM loans. The right amount balances your rate, mortgage insurance, and the cash you keep in reserve.
Typical Minimums by Loan Type
| Loan type | Typical program minimum | Notes |
|---|---|---|
| VA | None for eligible borrowers with full entitlement | Funding fee usually applies |
| FHA | 3.5% with a 580+ credit score | Mortgage insurance required |
| Conventional | 3% for some first-time buyer programs, often 5% | PMI below 20% down |
| Jumbo | Often 10–20% | Varies widely by lender |
| Bank statement | Often 10–20% | As little as 10% for a primary home with strong credit |
| DSCR (investment) | Usually 20–25% | 15% at some lenders with 720+; more for no-ratio |
These are general program rules. Your actual minimum depends on your credit, the property, and the lender's guidelines.
What a Bigger Down Payment Gets You
- Lower rate, since pricing usually improves at lower loan-to-value tiers
- Less or no mortgage insurance (see what PMI is)
- Lower payment, and on a rental, a higher DSCR
Why You Might Put Down Less
- Reserves. Lenders, and real life, reward having cash left after closing.
- Time. Buying sooner may matter more than waiting to save 20%.
- Other goals. Repairs, furniture, or for investors, the next deal.
Where the Money Can Come From
- Savings and investment accounts
- Gifts from family, on most owner-occupied loans, with a gift letter
- Retirement accounts, through a withdrawal or loan
- Down payment assistance programs, for eligible buyers
- Proceeds from selling another property
Lenders need to see where the money came from, so keep a clear paper trail for large deposits.
Down Payment FAQ
Do I need 20% down to buy a house?
No. Many programs allow much less. 20% down on a conventional loan avoids PMI.
How much down do I need for an investment property?
Usually 15–25% conventional and 20–25% DSCR, with 15% possible at some DSCR lenders for strong files.
Can my down payment be a gift?
On most owner-occupied loans, yes, with a gift letter. Investment loans have stricter rules.
In the financial industry since 2015. Licensed loan officer in Los Angeles, California. NMLS #1493724, with UTM Financial, LLC (NMLS #2591548). More about Ivan
This article is general education, not financial, tax, or legal advice. Loan guidelines vary by lender and change often. Not a commitment to lend.