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  • Writer's pictureAmber S

How Much Do I Need For A Down Payment?

The first question first time homebuyers usually ask is "How much down payment are we going to need"?

The necessary down payment is dependent upon a couple factors, such as, the type of loan you receive, and how much you are comfortable paying each month. With the help of Rocket Mortgage, here are some of the must-knows about down payments to help you decide what makes sense for your situation.

What are the minimum down payment requirements?

Some of the minimum down payment requirements depend on whether you're buying a primary residence, secondary residence, or investment property.

Primary Residence

Down payment requirements for your primary residence (main home) can vary. It depends on the type of loan you're applying for and your personal financial situation.

  • Conventional Loan: Requirements vary based on lender chosen. Some require 5% down, while others may only require 3%. If you have a credit score above 620, you may have access to lower down payment options.

  • FHA Loan: You will need a down payment of at least 3.5% (for this percentage you need a credit score of 580 or higher). If your credit score is between 500-579, you'll be required to put down at least 10%.

  • VA Loan: You don’t need a down payment to qualify for a VA loan. There are specific length-of-service requirements that determine your eligibility, and your discharge reason also plays a role. You can view complete service requirements for the VA loan program on the Department of Veterans Affairs (VA) website.

  • USDA Loan: No down payment needed. BUT to qualify, your home needs to be in an approved rural or suburban area and your household must meet certain income requirements.​

Secondary Residence

A second home is a residence you intend to occupy in addition to your primary residence. This typically is a vacation home or a property you visit on regular basis. Keep in mind restrictions on what is and isn't considered a second home may apply. For example, you can only rent the home for up to 180 days in a year.

  • Conventional Loan: Requirements are higher for people who want to buy a second home. To qualify for a loan on the second home, you'll need a down payment of at least 10%.

  • FHA Loans/ VA Loans/ USDA Loans: Cannot use these loans to buy a second property.

Investment Property

Investment property is real estate that you buy in order to earn a return on your investment, either through rental income, the future resale of the property or both.

  • Conventional Loan: If you buy a home with the sole intention of renting it out, you’ll need a conventional loan. Conventional loan requirements for investment properties are the strictest of any loan type. In most cases, you’ll need a down payment of 20 – 25% to qualify. If you have a credit score that’s higher than 720, you may qualify for an investment property loan with 15% down.

  • FHA Loan: Cannot use to buy an investment property

  • VA Loan: Cannot use to buy an investment property UNLESS you're financing the purchase of a multi-family home and will use one of the units as your permanent residence.

  • USDA Loan: Cannot use to buy an investment property

*disclaimer: we are not mortgage brokers, therefore this is general information provided based on averages. You should check with your mortgage professional for figures that would relate to your situation.

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