What is the minimum down payment required to purchase a home in the United States?
The minimum down payment is 0% for special government programs, but the answer you may see is as the absolute minimum is 3.0-3.5%.
Many people believe that homeownership is more expensive due to lack of knowledge of mortgage products. This misconception can have sinister implications. Perceiving the required downpayment as higher can make homeownership feel like an unaffordable dream.
See the table calculation below for an example.
Table 1 - Down Payment Misconception Visualized
| Median Home Price | Down Payment Assumption | Down Payment |
| 300,000 | 3.0% | $9,000 |
| 300,000 | 3.5% | $10,500 |
| 300,000 | 5.0% | $15,000 |
| 300,000 | 5.5% | $16,500 |
| 300,000 | 10.0% | $30,000 |
| 300,000 | 15.0% | $45,000 |
| 300,000 | 20.0% | $60,000 |
Low down payment programs are administered by both the FHA (Federal Housing Administration) and GSEs (Fannie Mae and Freddie Mac). FHA Loans require a down payment of 3.5%, while low down payment programs from the GSE's Freddie Mac and Fannie Mae that require down payments of 3%.
Knowing all your mortgage program options as early in life as possible will help you understand how to plan to achieve your financial dreams.
Useful Resources:
FHA Overview
Freddie Mac Homepath
Fannie Mae HomePath
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