Believing a 20% down payment is required to buy a home keeps many qualified buyers renting for years. Federal mortgage guidelines permit purchase options at far lower down payments.
CFPB and FHFA rules allow conventional first-time buyer loans with 3% down payments, while FHA loans require 3.5%. Putting less than 20% down requires paying monthly mortgage insurance.
Private mortgage insurance adds cost but enables home entry years earlier than saving 20% cash. Calculating mortgage insurance against home price growth clarifies the trade-off.
Understanding actual minimum down payment rules lets buyers plan home purchases on real guidelines.
What down payment percentage did you put down when buying your home, if you have bought one?
