What is the minimum down payment for a first-time home buyer under FHA loan in 2026?

Answer: The minimum down payment for a first-time home buyer using an FHA loan in 2026 is 3.5%. This requirement may vary depending on the lender's overlay and your credit profile.

Are there any income limits for USDA loans?

Answer: Yes, there are income limits for USDA loans. The eligibility varies by location and household size. To find out if you qualify, use the USDA income eligibility tool on their official website.

What closing costs should I expect when buying a home with a VA loan?

Answer: Closing costs for a VA loan can vary, but they typically include items like appraisal fees, origination fees, and title services. Some of these costs may be eligible for VA funding fee reduction or waiver, depending on your situation.

What are HomeReady and Home Possible, and how do they compare to conventional loans?

Answer: HomeReady and Home Possible are affordable lending solutions offered by Fannie Mae and Freddie Mac, respectively. These programs offer low down payment options (3% for both), flexible underwriting standards, and potential assistance with closing costs. Compared to conventional loans, they cater specifically to lower-income and first-time home buyers.

Are there any specific credit score tiers for FHA loans?

Answer: Yes, the minimum credit scores for FHA loans vary based on your lender's overlay and the loan product you choose. Typically, a score of 500 is required for maximum financing with a 10% down payment, while a score of at least 580 is needed to qualify for the minimum 3.5% down payment option.

Can first-time home buyers in Canada, the UK, or Australia follow the same down payment rules as those in the U.S.?

Answer: No, down payment requirements for first-time home buyers differ between countries. While this guide focuses on the U.S., it's essential to research local regulations and programs if you're considering buying a home in Canada, the UK, or Australia.

homebuying

Understanding the Minimum Down Payment for US First-Time

Justin Reynolds

August 23, 2026 3 min read

First-Time Buyers Down Payment Home Buying FHA Loan VA Loan

Key Takeaways

VA, USDA, and conventional loans offer 0% minimum down payment options
FHA requires a minimum down payment of 3.5%
Lender overlays and credit profile can impact cash needed at closing

This guide covers minimum down payment requirements for first-time home buyers in the U.S. in 2026, including FHA, VA, USDA, and conventional loans. Note: This page applies only to U.S. residents.

Eligibility

To be considered a first-time home buyer in the U.S., you must not have owned a primary residence in the past three years. Eligibility requirements for each loan type vary but generally include credit score, income, and debt-to-income ratio considerations.

Assistance Programs

There are several assistance programs available to help first-time home buyers with down payments and closing costs. These include Fannie Mae's HomeReady, Freddie Mac's Home Possible, and government-backed programs like the FHA, VA, and USDA.

Closing Costs

In addition to the down payment, you'll also need to budget for closing costs. These can include appraisal fees, title insurance, and attorney fees. Assistance programs may help with some of these expenses.

Talk to a lender about your minimum down payment options

Loan Type	Minimum Down Payment	Notes
Conventional	3%	HomeReady/Home Possible; PMI required below 20% down
FHA	3.5%	Requires a credit score of at least 580; 10% down for scores 500-579
VA	0%	Eligible veterans/service members; no PMI, but a funding fee applies
USDA	0%	Eligible rural properties and income limits apply

The 20% Myth

Many people believe that a 20% down payment is always required to buy a home. However, this isn't true. While a 20% down payment allows you to avoid private mortgage insurance (PMI), there are several loan options available with lower down payments.

HomeReady

Fannie Mae's HomeReady is a low-down-payment mortgage option for eligible first-time home buyers and repeat home buyers. It offers flexible underwriting criteria, including income and property location eligibility.

Home Possible

Freddie Mac's Home Possible is another low-down-payment mortgage option designed to help first-time home buyers, as well as lower-income families and individuals. It also offers flexible underwriting criteria.

FHA Credit Score Tiers

The FHA allows for lower credit scores compared to conventional loans. Typically, a score of 500 or higher is required with a 10% down payment, while a score of 580 or higher allows for a 3.5% down payment.

USDA Income Limits

The USDA offers low-down-payment mortgages to eligible rural home buyers with low-to-moderate incomes. The income limits vary by location, so it's important to check your specific area.

Cited Sources

Program terms and figures on this page change periodically -- verify current details with the linked sources above.

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