5 Mortgages With Down Payments Under 3.5%

Are you dreaming of owning a home but worried about coming up with a hefty down payment? Good news!

There are several mortgage programs available that allow you to buy a home with a down payment as low as 0% — yes, you heard that right!

Let’s dive into **five mortgage options** with down payments under 3.5%, making homeownership more accessible than ever.

1. FHA Loan – 3.5% Down Payment

The **FHA (Federal Housing Administration) 203b loan** is one of the most popular low-down-payment options for buyers. With just a 3.5% minimum down payment required, this loan is a great choice if you’re looking to get into a home without a significant upfront cost. To qualify, you’ll need:

- A **FICO score of at least 580** (a lower FICO score is allowable, but the down payment amount increases)

- A loan limit of up to **$1,149,825** for a 1-unit property in high-cost areas like Los Angeles (this amount is set to increase for 2025). Multi-units are also allowable

- The home must be your primary residence

- 100% of the down payment can come from a gift, making it easier for you to secure your new home.

This loan is ideal for first-time buyers or anyone looking to reduce their initial cash outlay when buying a primary residence.

2. FHA 203k Loan – 3.5% Down Payment with Renovation Funds

Looking to buy a fixer-upper? The **FHA 203k loan** lets you borrow extra funds to renovate your new home, all with the same 3.5% down payment.

This loan offers the same benefits as a traditional FHA loan but includes the cost of repairs or updates. You get the funds you need to improve your property without having to take out a separate renovation loan.

Remember, the home must be your primary residence to qualify, but this can be a great way to buy a home that needs some TLC.

3. Conventional Loan – 3% Down Payment

If you’re a **first-time homebuyer**, a **Conventional loan** might be the right fit for you. With just 3% down, you can avoid the higher upfront costs typically associated with conventional loans. However, to qualify, you’ll need:

- **AUS approval** (Automated Underwriting System), which evaluates your eligibility

- A loan limit of up to **$1,149,825** for a 1-unit property in high-cost areas like Los Angeles (this amount is set to increase for 2025). Multi-units are also allowable

- The home must be your **primary residence**

- At least one borrower must be a first time homebuyer. This doesn't mean you can never have owned a home, it just means you can't have owned a home in the last 3 years

This is a great option for buyers who qualify and are looking to minimize their down payment while taking advantage of the flexibility of a conventional mortgage.

4. VA Loan – 0% Down Payment

For eligible veterans, active-duty service members, and some members of the National Guard and Reserves, the **VA loan** offers incredible benefits, including a **0% down payment**. To qualify, you’ll need:

- A **FICO score of at least 580**

- The property must be your **primary residence**

- The option to take advantage of **jumbo VA loan amounts** for high-cost areas, meaning you can borrow more than the standard VA loan limits.

This program offers some of the best terms on the market, making it a fantastic opportunity for those who’ve served to become homeowners with no down payment.

5. USDA Loan – 0% Down Payment for Rural Areas

The **USDA loan** is another program offering a **0% down payment**, but it’s designed specifically for homes in rural or suburban areas. To qualify, you’ll need:

- A **FICO score of at least 620**

- The property must be in a qualifying non-urban area

- In high-cost areas like Los Angeles, the loan limit can be as high as **$919,800** (this amount is set to increase for 2025)

If you’re looking to buy a home in a less densely populated area, the USDA loan can be an excellent choice, especially with its zero down payment requirement.