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Buying a home with a low down payment

Think it’s impossible to buy a home unless you have 20% saved up? Maybe not. Low down payment options may be more common than you think—if you know where to look.

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7 in 10
first-time homebuyers put down less than 20%
Source: REALTORS® Confidence Index Survey Report, 2022

Certain loans allow you to put 3% down, or even less.

On a $300,000 home:
3% $9,000
20% $60,000

In addition, you may be able to use a government or nonprofit program to get help with your down payment or other upfront costs.

Consider low-down-payment loan options. These might include:

Lender-specific loans
You may be able to lower the amount of funds needed for a down payment or closing costs. Some of these loans may require PMI. Ask your lender if the funds may come from gifts, grants or homebuyer assistance programs.

The Affordable Loan Solution® mortgage offers a 3% down payment and a competitive rate. Mortgage insurance is required; however, it’s at a reduced cost from most conventional loans.1

Federal Housing Administration (FHA) loan
It allows a down payment as low as 3.5%. You pay an upfront amount for mortgage insurance and annual insurance premiums.2

VA loan
Veterans may qualify for a 0% down loan.3

Ask your lender about down payment or cost-saving programs to help offset upfront costs.
You may need to take a homebuyer education course or stay in the home for a certain number of years to be eligible for these programs, which may be offered by:

  • State or local housing agencies
  • Nonprofit organizations
  • Your employer, if you work for a large company or public institution, such as a university

Find down payment or cost-saving programs4 you may qualify for at the Bank of America Down Payment Center.

Your eligibility might also depend on:

  • The type of mortgage
  • Your household income
  • Your credit score
  • The property location

Combining a low-down-payment loan with one or more homebuyer assistance programs can reduce the cash you need to close, so you have more savings for:
Home maintenance
Car repair
Health emergency
Other surprise needs

Remember: A low down payment isn’t right for everyone.
A low-down-payment strategy may help you buy your home, but it means you have less equity, your monthly payment will be higher and you may pay more interest over the life of the loan. It’s best to do research and compare your options. Speak with a lending specialist to prequalify5 and find out how much you will need for a down payment on a home you can afford.

  1. Maximum income and loan amount limits apply. Fixed-rate mortgages (no cash out refinances), primary residences only. Certain property types are ineligible. Maximum loan-to-value (“LTV”) is 97%, and maximum combined LTV is 105%. For LTV >95%, any secondary financing must be from an approved Community Second Program. Homebuyer education may be required. Other restrictions apply.
  2. Monthly Mortgage Insurance Premiums (MIP) and Upfront Mortgage Insurance Premiums (UFMIP) apply. Maximum loan amounts vary by county.
  3. VA funding fee applies except as may be exempted by VA guidelines. The fee is higher with a zero down payment, and maximum loan limits vary by county. If a down payment of 5% or more is made, the fee is reduced. The VA funding fee is non-refundable. Ask for details about eligibility, documentation and other requirements.
  4. Down payment and/or closing cost assistance programs may not be available in your area. Down payment and/or closing cost assistance amount may be due upon sale, refinance, transfer, repayment of the loan, or if the senior mortgage is assumed during the term of the loan. Some programs require repayment with interest and borrowers should become fully informed prior to closing. Not all applicants will qualify. Minimum credit scores may apply. Sales price restrictions and income requirements may apply. Homebuyer education may be required. Owner-occupied properties only. Maximum loan amounts may apply.
  5. Prequalification is neither preapproval nor a commitment to lend; you must submit additional information for review and approval.
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The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

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Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.