Buying your first home can feel like stepping into a world with its own language, and one of the biggest myths you’ve probably heard is that you need 20% down to even think about becoming a homeowner. That’s just not true.
If you’ve been stressing about saving up $70,000 for a 20% down payment on a $350,000 home, you’re not alone. That number sounds intimidating—but the good news is, you probably don’t need anywhere near that much.
Let’s break it down with a real example. For a $350,000 home, here’s what different down payment amounts might look like:
- 3% down: $10,500
- 3.5% down: $12,250
- 5% down: $17,500
- 10% down: $35,000
- 20% down: $70,000
Even that 3% option—just over $10,000—can feel like a lot, but there are programs that can help. From low down payment loans to zero down options and even gift funds from family, getting into a home may be more doable than you think.
Let’s walk through the most common loan types and how much you really need for each—plus ways to get help covering your down payment so you can start building equity instead of paying rent.
FHA Loans
Low Down Payment with Flexible Eligibility
FHA loans are one of the most popular options for first-time homebuyers, and for good reason. They’re more flexible on credit requirements and only require 3.5% down, which is $12,250 on a $350,000 home.
- Best for: Buyers with limited savings or lower credit scores (as low as 580 with 3.5% down).
- Mortgage Insurance: Required both upfront and monthly.
- Bonus Tip: You can combine an FHA loan with down payment assistance to reduce or eliminate your out-of-pocket costs.
Chec out our FHA Loan Guide for more information about requirements, limits and down payment programs.
Down Payment Assistance Programs
Grants or Forgivable Loans to Help You Buy Sooner
DPA programs can cover part—or all—of your down payment and even closing costs.
- Best for: First-time buyers or moderate-income households who qualify based on income, location, or occupation (like teachers, first responders).
- What You Get: Grants, forgivable loans, or deferred-payment loans.
- Bonus Tip: Many programs allow pairing with FHA or conventional loans—ask us to help you check eligibility in your area.
Conventional Loans
Flexible Options with Competitive Rates
Conventional loans are the go-to option for buyers with strong credit and a bit more saved up. Some programs allow 3% down for qualified first-time buyers—that’s $10,500 on a $350,000 home.
- Best for: Buyers with 620+ credit scores and steady income.
- Mortgage Insurance: Required if you put down less than 20%, but it can be canceled later.
- Bonus Tip: You may qualify for reduced mortgage insurance through Fannie Mae’s HomeReady® or Freddie Mac’s Home Possible®.
VA Loans
$0 Down for Veterans and Active-Duty Military
If you’re eligible for a VA loan, it’s hard to beat. VA loans require no down payment, no monthly mortgage insurance, and offer competitive interest rates.
- Best for: Veterans, active-duty service members, some surviving spouses.
- Bonus Tip: Even if you’ve used your VA benefit before, you may still be eligible again. Let’s check your COE (Certificate of Eligibility).
USDA Loans
$0 Down for Homes in Eligible Rural Areas
USDA loans offer another no-down-payment option—but the home must be in a designated USDA-eligible location.
- Best for: Moderate-income buyers purchasing in rural or semi-rural areas.
- Income Limit: Usually capped at 115% of the area’s median income.
- Bonus Tip: “Rural” doesn’t always mean farmland—some suburban areas qualify. Ask us to look up your desired property address!
Gift money from family members can be used to cover your down payment and even closing costs.
- Best for: Buyers with family willing to help but who don’t want to take on a loan.
- Allowed Uses: Down payment, closing costs, interest rate buydowns.
- Gift Limits (2025): Up to $38,000 from parents (combined) or $19,000 from other relatives without triggering gift tax.
Ready to Find Your Perfect Home?
Whether you’re just starting to plan or already saving, you don’t have to figure it all out alone. At Ideal Lending, we’ll walk you through your options—from low and no down payment loans to gift fund rules and assistance programs. Let’s make homeownership happen.
This post was updated in April 2025 to keep the information current.
