Low Down Payment Options
You do not need 20% down to buy a home. Multiple loan programs offer down payments as low as 0-3.5%, making homeownership more accessible for Texas buyers.
Do You Need 20% Down to Buy a House in Texas?
No. One of the biggest myths in real estate is that you need a 20% down payment to buy a home. The reality is that most buyers put down far less. Programs are specifically designed to help creditworthy borrowers get into a home without years of additional saving.
At Mortgage Austin, we specialize in helping buyers understand their low-down-payment options. Whether it is 3% down on a conventional loan, 3.5% on FHA, or 0% on a VA loan, we match you with the right program for your financial situation.
Less money down means more cash in your pocket for moving expenses, furniture, home improvements, or simply keeping a healthy savings cushion. We help you weigh the trade-offs so you can make a confident decision.
Key facts:
- Conventional: as little as 3% down (Conventional 97, HomeReady, Home Possible)
- FHA: 3.5% down with more flexible credit guidelines
- VA: 0% down with no monthly mortgage insurance for eligible borrowers
- Less than 20% down usually means mortgage insurance (PMI or MIP); VA is the exception
- Gift funds and seller concessions can cover part of your upfront costs
Your Low Down Payment Options
3️⃣
3% Down Conventional
Programs like Conventional 97, HomeReady, and Home Possible allow as little as 3% down for qualified buyers with good credit.
🏛️
3.5% Down FHA
FHA loans offer 3.5% down with more flexible credit requirements. A strong option for buyers who need a little more room on qualifications.
🎖️
0% Down VA Loan
Eligible veterans and active-duty service members can purchase with zero down payment and no monthly mortgage insurance.
What Are the Trade-Offs of a Low Down Payment?
Putting less than 20% down usually means carrying mortgage insurance (PMI on conventional loans, MIP on FHA; VA loans are the exception), a larger loan amount with a higher monthly payment, and a smaller starting equity position. Gift funds and seller concessions can offset much of the upfront cost. Here are the trade-offs to understand:
| Program | Minimum down payment | Monthly mortgage insurance |
|---|---|---|
| Conventional | 3% | PMI until you reach 20% equity |
| FHA | 3.5% | MIP |
| VA | 0% | None |
✓ Mortgage insurance: Loans with less than 20% down typically require mortgage insurance (PMI for conventional, MIP for FHA). VA loans are the exception.
✓ Monthly payment: A smaller down payment means a larger loan amount, which results in a higher monthly payment.
✓ Equity position: You start with less equity in the home. This matters if you plan to sell or refinance in the near term.
✓ Gift funds: Many low-down-payment programs allow gift funds from family members for part or all of the down payment.
✓ Seller concessions: The seller can contribute toward your closing costs, further reducing your out-of-pocket expense at closing.
We help you run the numbers side by side so you can see exactly how different down payment amounts affect your monthly cost and total loan expense.
Frequently Asked Questions
Ready to Buy With Less Down?
No pressure, no obligation. Let us walk you through your options and find the right fit for your situation.