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You may not need 20% down. Several government-backed and conventional loans allow 0% to 3.5% down, and every state has a housing finance agency that runs first-time buyer programs, often with down payment or closing cost help. This page lists each state's agency, the federal loan options and their rules, and shows the smallest down payment each loan allows on your price.
Checked Oct. 24, 2026
Runs on your phone; nothing you type is sent anywhere. Uses each program's published maximum loan-to-value.
These state agencies (members of the National Council of State Housing Agencies) offer first-time buyer loans, down payment and closing cost assistance and, in many states, mortgage credit certificates. Each link goes to the agency's own homebuyer page. Rules, income limits and price limits differ by state.
Agency list: NCSHA member directory. Every link opened Oct. 24, 2026.
| Loan | Minimum down | Who qualifies | Good to know |
|---|---|---|---|
| FHA loan | 3.5% with a 580+ credit score (10% with 500-579; under 500 not eligible) | Anyone who qualifies; first-time buyers not required | Down payment can be a gift or a government down payment assistance grant; not from the seller. Mortgage insurance required. County loan limits apply. Source |
| VA loan | $0 if the price isn't above the appraised value | Eligible veterans, service members, some surviving spouses (Certificate of Eligibility) | No PMI; a funding fee applies unless exempt. See our VA loan facts. Source |
| USDA guaranteed (Section 502) | $0 (100% financing) | Income no higher than 115% of the area median; eligible rural area; primary home | No credit score requirement set by USDA; 30-year fixed only; apply through an approved lender. Source |
| USDA direct (Section 502) | Typically $0 | Low and very-low income; eligible rural area; can't get other credit | Rate 5.750% from Oct. 1, 2026, as low as 1% with payment assistance; up to 33 years (38 for very low income). Apply at your local USDA office; part of the subsidy is repaid when you sell or move. Source |
| Fannie Mae HomeReady | 3% (up to 97% loan-to-value) | Income at or below 80% of the area median; first-time and repeat buyers | Homeownership education required if every buyer is a first-time buyer; $2,500 credit for very low-income first-time buyers (loans bought Mar. 1, 2025-Feb. 28, 2027). Conforming loan limit applies. Source |
| Freddie Mac Home Possible | 3% (up to 97% loan-to-value) | Income at or below 80% of the area median | Mortgage insurance can be cancelled once the balance falls below 80% of the value. Conforming loan limit applies. Source |
FHA: 12 U.S.C. 1709(b)(9) sets the 3.5% minimum; HUD Handbook 4000.1 sets the credit score tiers and 96.5% maximum (of the lower of price and value). Gift and assistance sources: HUD. Loan limits: FHFA 2026 conforming limits ($832,750 baseline; $1,249,125 high-cost ceiling; $1,249,125 baseline and $1,873,675 ceiling in Alaska, Hawaii, Guam and the U.S. Virgin Islands).
HUD-approved housing counseling agencies help with budgets, credit, local assistance programs and the education some programs require. Call 800-569-4287 (TTY 202-708-1455), 8 AM-8 PM ET (HUD), or search by ZIP with the CFPB counselor finder.
Before you wire closing money: call your title or closing company at a number you already have, never one from an email. See wire fraud: how it works and what to do.
Facts, not advice. Program rules change and lenders can set stricter rules. Confirm with the agency or lender. No affiliate or partner links on this page.
It depends on the program. For the IRS $10,000 IRA exception, you (and your spouse) must have had no present interest in a main home during the 2 years ending on the date you buy. State agency loans paid for with mortgage revenue bonds generally go to buyers who haven't owned a principal residence in the last 3 years, with exceptions for targeted areas and for veterans. FHA, VA and USDA loans don't require you to be a first-time buyer.
Start with your state's housing finance agency. Every state and DC has one, listed on this page with a link to its homebuyer programs. They typically work through approved local lenders. A HUD-approved housing counselor (800-569-4287) can also tell you about local programs.
$0 for VA loans (if the price isn't above the appraisal) and USDA loans in eligible rural areas, 3% for Fannie Mae HomeReady and Freddie Mac Home Possible (income up to 80% of the area median), and 3.5% for FHA with a credit score of 580 or higher (10% with 500-579).
Up to $10,000 (lifetime) taken from an IRA for a qualified first-time home purchase avoids the 10% additional tax on early distributions. Regular income tax rules still apply. The exception is for IRAs only, not 401(k) or other workplace plans.
A certificate from a state or local agency that turns part of your mortgage interest into a federal tax credit. The certificate rate must be between 10% and 50% of the interest; if it's above 20%, the credit is capped at $2,000 a year. You claim it on IRS Form 8396.
For FHA loans, yes. HUD lists you, family members, your employer or labor union, close friends, charitable organizations and government down payment assistance programs as acceptable sources. The seller, or anyone who profits from the sale, is not.
$832,750 for a one-unit home in most of the country, up to $1,249,125 in high-cost areas (FHFA). HomeReady and Home Possible loans must fit under the limit for your county.
Estimates, not financial advice. Taxes, insurance, PMI and fees vary by lender, county and city; confirm with your lender, dealer and state agency before acting.