Traditional mortgage down payments have always been 10 to 25 percent of the total purchase price of the property.

These are usually still required of people who have owned a home for five or more years and have built up enough in equity to cover most if not all of the down payment requirement on another home.

What about first-time home buyers or those with little to no equity? In today’s market, it is prohibitive even for the most frugal of first-time home buyers to come up with a traditional down payment. Houses that sell for $200,000 would require a down payment of $20,000 to $40,000,

However, thanks to government backed loans there are options for you if you don’t have the money for a large down payment!

Let’s look at some of them.

Va Loans

Veterans Administration loans are designed to help service people and veterans obtain financing at very reasonable rates. They don’t require a down payment or mortgage insurance. These loans are backed by the federal government. These are probably the very best loans available.

FHA Loans

The Federal Housing Administration was created to help middle- to lower-income buyers secure home loans. The FHA doesn’t actually lend the money; instead, it insures the loan. The FHA requires only a 3.5 percent down payment. There are guidelines, and the buyer’s credit is important to meeting these requirements

Fannie Mae and Freddie Mac

These federally chartered programs offer loans for 3 percent down. They either own the loan or guarantee it. A buyer must meet certain criteria.


A USDA loan (also called a Rural Development Loan) is a government insured home loan that allows you purchase a home with NO Money Down. USDA Loans offer 100% financing to qualified buyers, and allow for all closing costs to be either paid for by the seller or financed into the loan. USDA offers some the lowest rates of any loan, and you will always have a fixed interest rate.

USDA loans do require that your home is in a USDA eligible area. If you would like to check on a specific address for property eligibility click the following link

Property EligibilityUSDA Eligibility