A Friendly Guide to Today’s Most Common Loan Types
One of the biggest questions homebuyers ask is:
“How much do I need for a down payment?”
The truth is, the answer depends on the type of loan you qualify for. And while many buyers still believe they need 20% down, today’s mortgage programs are more flexible than ever — with some requiring as little as 0% down.
Below is a simple breakdown of the most common loan types and their minimum down payments, followed by a user-friendly chart that lays it all out visually.
🔍 Minimum Down Payments by Loan Type
✅ Conventional Loan — Minimum 3% Down
Conventional loans offer flexibility and are great for buyers with solid credit.
- 3% down for first-time buyers and qualifying programs
- 5%+ down for repeat buyers
- 20% down removes mortgage insurance entirely
Best for: Borrowers with good credit, stable income, and moderate savings.
✅ FHA Loan — Minimum 3.5% Down
The Federal Housing Administration (FHA) allows much lower credit scores than conventional loans.
- 3.5% down for buyers with a credit score of 580+
- 10% down for scores below 580
Best for: Buyers with lower credit or past credit challenges.
✅ VA Loan — 0% Down
For eligible veterans, active-duty service members, and certain surviving spouses.
- 0% down
- No monthly mortgage insurance
- A VA Funding Fee may be required
- Best for: Eligible military families.
✅ USDA Loan — 0% Down
Designed for rural and suburban areas that meet USDA eligibility guidelines.
- 0% down
- Income limits apply
- Geographic restrictions apply (look up tool)
Best for: Buyers purchasing in qualifying rural/suburban areas.
✅ Jumbo Loan — Typically Starts at 10% Down
Jumbo loans exceed conforming loan limits and are designed for higher-priced homes.
- 10% down is common
- Some lenders require 15–20%+ depending on credit, reserves, and loan size
Best for: High-income buyers or those purchasing in higher-price markets.
🏁 Final Thoughts
Today’s mortgage programs are more flexible than most buyers realize. Whether you’re purchasing your first home or upgrading to your next one, understanding your down payment options helps you plan confidently.
From 0% down VA and USDA loans to conventional options starting at just 3%, you likely have more buying power than you think.
Reach out to a Sequence Mortgage Advisor to create your personalized mortgage strategy.
