Updated October 2026. General information for US readers, not personalized financial, tax, insurance or legal advice.
You don’t need 20% down to buy your first home. Several loan types let you buy with far less, and some eligible buyers can put nothing down. The trade-off is usually mortgage insurance. Here’s how the main options compare in 2026.
Key takeaways
- FHA loans need 3.5% down with a credit score of 580 or higher, or 10% down with a score of 500 to 579.
- FHA loans charge an upfront and a monthly mortgage insurance premium.
- The 2026 conforming loan limit for most of the US is $832,750.
- VA and USDA loans can allow zero down for eligible buyers.
FHA Loans
FHA loans are insured by the Federal Housing Administration and are popular with first-time buyers because the credit requirements are more flexible. According to Experian (Experian):
- Down payment: 3.5% with a credit score of 580 or higher, or 10% with a score of 500 to 579.
- Upfront mortgage insurance: 1.75% of the loan amount, which is usually added to the loan.
- Monthly mortgage insurance: about 0.15% to 0.75% of the loan per year for most borrowers, paid monthly.
Example: On a $300,000 home, 3.5% down is $10,500. The upfront premium on the $289,500 loan would be about $5,066.
Conventional Loans
Conventional loans aren’t backed by a government agency. Some programs for first-time and moderate-income buyers allow as little as 3% down. If you put down less than 20%, you’ll usually pay private mortgage insurance (PMI), which can be removed once you build enough equity, unlike FHA mortgage insurance in many cases.
Conventional loans that follow Fannie Mae and Freddie Mac rules have a maximum size, called the conforming loan limit. For 2026, it’s $832,750 for a one-unit home in most of the US, and up to $1,249,125 in high-cost areas (FHFA).
FHA vs. Conventional at a Glance
| FHA loan | Conventional loan | |
|---|---|---|
| Minimum down payment | 3.5% (580+ score) or 10% (500–579) | As low as 3% for some programs |
| Credit score | More flexible | Usually higher scores get the best rates |
| Mortgage insurance | Upfront 1.75% plus monthly premium | PMI if under 20% down; can be removed later |
| Loan limits | Set by county | $832,750 in most areas for 2026 |
| Best for | Lower credit scores or small down payments | Good credit and plans to remove PMI |
Zero-Down Options
- VA loans: for eligible veterans, service members and some surviving spouses. They usually require no down payment and no monthly mortgage insurance.
- USDA loans: for eligible buyers in qualifying rural and suburban areas, with income limits. They can allow zero down.
Down Payment Assistance
Many state and local housing agencies offer grants or low-interest loans for down payments and closing costs, often for first-time buyers. Search your state housing finance agency’s website, or ask a lender which local programs they work with.
Steps to Buy Your First Home
- Check your credit. Get free reports and fix errors. See how to get free weekly credit reports.
- Set a budget. Include taxes, insurance, mortgage insurance and maintenance, not just the loan payment.
- Save for closing costs as well as the down payment.
- Get preapproved by more than one lender and compare their Loan Estimates.
- Make an offer and get a home inspection before closing.
Frequently Asked Questions
Who counts as a first-time home buyer?
Many programs count you as a first-time buyer if you haven’t owned a home in the past three years, but definitions vary by program. Check the rules for each one.
Is it better to wait until I have 20% down?
Not always. Waiting avoids mortgage insurance, but home prices and rents can rise while you save. Compare the total monthly cost of buying now with a smaller down payment against waiting.
Does shopping for a mortgage hurt my credit?
Several mortgage inquiries within a short window are usually treated as a single inquiry for scoring, so compare lenders within a few weeks.
Related Guides
Sources: Experian: FHA loan down payment requirements; FHFA: 2026 conforming loan limits.