Minimum down payments can range greatly depending on the type of property, loan type and borrower credentials. Here are a few of the more common down payment options explained.
No down payment required – There are several loans that can be categorized as having no down payment. All of these options are available for primary residences only.
- VA Loans – These loans are available to active or retired military and their spouses. In most cases, there is no down payment required.
- Rural Housing Loans – These loans are available in rural areas that qualify as USDA eligible zip codes/areas. In most cases, no down payment is required.
- First Time Home Buyer Programs – Many first time home buyer programs offer down payment assistance with can many times cover the entire required down payment. Maryland, Washington, DC and Virginia all offer their own down payment assistance programs.
Low down payment required- These include Conventional and FHA loans when no down payment assistance program is included. These are only available on primary residences.
- Low down payment options – Typically, 3% down is the lowest down payment option for Conventional mortgages, where FHA mortgages require a 3.5% minimum down payment. In other cases with Conventional financing, 5% down may be the lowest eligible down payment when the loan amount exceeds the conforming loan limit.
Larger down payment required – These include situations with alternative property types and occupancy types.
- Investment properties – These typically require no less than 15% down, but it depends on the number of units. 2-4 units would require no less than 25% down.
- Multi-unit homes (2-4 units) – With Conventional mortgages, these will require between 15-25% down depending on residence type.
- Non-conforming loans (Jumbo loans) – Typically these will require no less than 10% down, however the down payments required could be be much higher depending on loan size.
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