Commonly 5%, as little as 3% on some loans, and 20% isn't the minimum. It's the point where mortgage insurance stops being asked for.

Most people asking this have heard twenty percent. Twenty percent is real, but it describes something else: the down payment at which a conventional loan stops carrying mortgage insurance. The smallest down payment the conventional market commonly asks for is a fraction of that, and the number that applies to you is set less by your savings than by the house, and by whether you'll live in it. I place conventional loans, and this is usually the first question about them.

So this page starts with the floor and who reaches it, then what twenty percent actually changes, then how the number moves with the kind of property. After that it covers the questions that ride along with this one: what loan-to-value means, what "conventional" means next to "conforming" and "portfolio", foreclosures, how a conventional loan compares with FHA, VA and USDA, and how student loans get counted.

The floor

The smallest down payment is 3%, and it comes with conditions

Fannie Mae and Freddie Mac write the rules most conventional loans follow, and both publish a 3% down payment option on a one-unit home you'll live in. Fannie Mae's is HomeReady. Freddie Mac's is Home Possible. Each is for buyers whose qualifying income is no more than 80% of the area median income where the home is, and that limit is each programme's own, published in its own documents. Fannie Mae also allows 3% down outside HomeReady on a one-unit home you'll live in when at least one buyer is a first-time home buyer.

If neither fits, the common starting point is 5% down. Fannie Mae's matrix allows a loan of up to 95% of the value on a one-unit home you'll live in, without an income limit or a first-time-buyer condition. Lenders and consumer-finance pages describe 3% as possible for some buyers and 5% as the more common baseline, and both are starting points for a conversation rather than a figure for any one file.

The down payment isn't the only cash a purchase asks for. Closing costs come on top of it, and whether any of them can go into the loan is answered at can you roll closing costs into a mortgage.

Twenty percent

Twenty percent isn't a requirement. It's where mortgage insurance stops

Fannie Mae asks for mortgage insurance on a conventional loan above 80% of the home's value, which is the same thing as a down payment under 20%. The insurance protects the lender, not you, and the cost of it goes on your Loan Estimate. Put 20% down and a conventional loan doesn't carry it.

Under 20% down, the insurance isn't permanent. Under the Homeowners Protection Act, on a home you live in, you can ask your servicer to cancel it once your balance is scheduled to reach 80% of the home's original value, and the servicer has to end it once the balance is scheduled to reach 78%, provided your payments are current. If neither has happened by the midpoint of the loan's schedule, it ends then, as long as you're current. Fannie Mae and Freddie Mac can set cancellation rules more generous than the Act, but not less generous.

Some lenders offer a conventional loan with a small down payment and no monthly mortgage insurance, in exchange for a higher rate. Whether that trade costs more or less depends on how long you keep the loan, and it's one worth pricing both ways.

By property

What moves the number is the house, and whether you'll live in it

These are the maximums in Fannie Mae's current Eligibility Matrix for a purchase under its automated underwriting, written both ways, as the largest loan against the value and as the smallest down payment that leaves:

A two- to four-unit home you'll live in: up to 95%, so 5% down. A duplex, triplex or fourplex where you live in one unit is the same 5% case. On HomeReady, Fannie Mae asks that 3% of the price come from your own funds on a two- to four-unit home, unless a grant is involved. Larger loans on two to four units carry lower maximums.

A second home: up to 90%, so 10% down. Fannie Mae limits second homes to one unit, occupied by you for part of the year and not run as a rental.

An investment property with one unit: up to 85%, so 15% down. With two to four units: up to 75%, so 25% down.

There is also a ceiling on the loan itself. A conforming loan has to fit under the limit FHFA sets each year, and FHFA's baseline for a one-unit home in 2026 is $832,750 in most of the country. Higher-cost areas have higher limits, and a loan above the limit for its county is a jumbo loan, which lenders write to their own rules.

The ratio

Loan-to-value is the same fact, said the lender's way

Loan-to-value, or LTV, is the loan amount divided by the property's value. On a purchase, Fannie Mae uses whichever is lower, the price you agreed to or the appraised value. On a refinance it uses the appraised value. A 5% down payment is a 95% LTV, 20% down is 80%, and every down payment on this page can be read either way.

The lower-of rule matters when an appraisal comes in under the price. The loan is still measured against the appraisal, so the gap comes out of your cash, or out of the price if the seller will move.

LTV is also one of the things a lender prices on, alongside your credit and the kind of loan, so a larger down payment can change the rate as well as the insurance.

What the word means

Conventional, conforming and portfolio aren't three names for one loan

The CFPB defines "conventional" simply: the loan isn't part of a specific government programme. That makes FHA, VA and USDA loans the government ones, and everything else conventional.

Most conventional loans are also conforming: written to Fannie Mae's or Freddie Mac's rules and inside the conforming limit, so they can be sold to one of them. Every down payment on this page is a conforming rule, because those are the rules most people mean when they say "conventional loan".

A portfolio loan is one the lender keeps on its own books instead of selling. It isn't a government loan, so in the broad sense it's conventional, but it isn't written to Fannie Mae's or Freddie Mac's rules, so the lender sets its own down payment and its own terms. Lenders describe portfolio loans as the route for files that don't fit the conforming rules, such as unusual income, unusual property or a larger loan, often at a higher price for the flexibility. For investors, one loan outside the conforming rules qualifies on the property's rent rather than your income, and how a DSCR loan works has a page of its own.

Foreclosures

A foreclosure is financed on its condition, not its history

Yes, you can buy a foreclosed home with a conventional loan. As one lender's page puts it, a foreclosure is a financial event, not a property condition, and the loan looks at the house the way it looks at any other: through the appraisal.

What decides it is condition. Fannie Mae accepts a home as it stands when its problems are minor, the worn finishes and small leaks of ordinary wear. It doesn't accept one with a deficiency that affects safety, soundness or structural integrity until that's repaired, and the appraisal is written subject to the repair. Foreclosures are commonly sold as-is, so the seller may not be the one making it.

When the repairs are bigger than a seller will take on, renovation loans fold the cost of the work into the mortgage. Fannie Mae's is HomeStyle Renovation. A home inspection is a separate thing from the appraisal, and on an as-is sale it's the way to find out what you're buying.

Compared

Against FHA, VA and USDA, in words rather than a calculator

This isn't a calculator. Here's what one would be weighing.

FHA is a government-insured loan that reads credit more forgivingly and asks for a little more down than conventional's lowest option. Its mortgage insurance, on the loan most people take, stays for the life of the loan, where conventional mortgage insurance comes off. FHA finances only the home you live in. If your credit is strong and you have some savings, conventional commonly costs less over time, mostly because of that insurance; if your credit is thinner, FHA is often the one that works. How FHA's mortgage insurance works is on the FHA page.

VA is for veterans, servicemembers and eligible surviving spouses. VA's own page describes no down payment as long as the price isn't above the appraised value, and no monthly mortgage insurance. If you're eligible, it belongs in the comparison before conventional does. VA also orders its own appraisal, and how VA prices that appraisal has a page of its own.

USDA asks nothing down but applies to the address and the household: the home has to be in an eligible area and the household's income has to fit USDA's limit. A USDA loan also can't be reached later by refinancing out of a conventional one, so it's a choice made at purchase. USDA against FHA starts with the address for that reason.

What conventional does that the others don't: it finances second homes and investment property, its mortgage insurance ends, and the CFPB describes conventional loans as typically costing less than FHA loans, though they can be harder to get. Those are the benefits that hold up at source. Which programme comes out ahead on your file depends on your credit, your down payment and the property, and it's something we can lay side by side.

Student loans

Student loans are counted at a payment, even when you aren't paying one

On a loan written to Fannie Mae's rules, the lender can use the student-loan payment on your credit report. If the report is wrong, the lender can use the payment on your latest student-loan statement.

If the report shows no payment, Fannie Mae gives the lender options. On an income-driven plan where the documented payment really is zero, the lender can qualify you at zero. On a loan in deferment or forbearance, the lender can count 1% of the balance as the monthly payment, or a fully amortizing payment from the loan's documented terms.

That is Fannie Mae's rule. Freddie Mac and the government programmes publish their own, and I haven't quoted them here.

The questions people ask about conventional down payments

Conventional down payment questions

Where yours falls

Tell me what you're buying and what you have

The kind of home, whether you'll live in it, roughly what you have saved and roughly what you earn: that's enough to see which of these programmes fits, and what each would ask of you. No credit pull, no application and nothing to sign to start that conversation.