How Much Do Buyers Need for a Down Payment?

by Delisa Lapinsky

One of the biggest misconceptions in real estate is that buyers must put 20% down to purchase a home. That used to be a common belief, but today it’s simply not true.

Many buyers qualify for options such as:

3% down conventional (certain programs)
5% down conventional
FHA financing with lower down payment requirements
VA loans for qualified buyers

The real question isn’t “What’s the minimum down payment?” - it’s what amount makes a buyer strong without draining savings.

Putting more down can lower the monthly payment and may reduce or eliminate PMI (private mortgage insurance). But there’s a trade-off: buyers who put every dollar into the down payment often end up house rich and cash poor, which creates stress after closing.

In many cases, the smartest buyers keep reserves for:

moving expenses
unexpected repairs
furniture and appliances
normal life costs

The down payment strategy should match the buyer’s bigger plan - not just the lender’s minimum. For example, in growing areas like Fate and Royse City, builder incentives can sometimes reduce how much cash a buyer needs. In established neighborhoods like Rockwall, Heath, or Plano, the stronger opportunities often come from negotiating on homes that have been sitting and need some updates.

The best down payment plan balances three things: