You do not need 20% down to buy a house. Most buyers need far less: conventional loans can go as low as 3% for many first-time buyers, FHA commonly requires 3.5%, and VA and USDA loans can require nothing down for eligible borrowers. Twenty percent is the point where conventional mortgage insurance goes away, not the price of admission.
Minimum down payment by loan type
General program minimums, which lenders and specific products can raise:
- Conventional, first-time buyer or income-eligible: as low as 3%.
- Conventional, standard: commonly 5%.
- FHA: 3.5% with a qualifying score, more with a lower score. See the FHA Loan Arizona Guide.
- VA: zero down for eligible veterans and service members with full entitlement. See the VA Loan Arizona Guide.
- USDA: zero down in eligible rural areas with income limits. Large parts of metro Phoenix are not eligible, but some outlying areas are.
- Jumbo: typically 10% to 20%, depending on the lender, score and loan size.
- Investment property: typically 15% to 25%. See DSCR vs Conventional for Investors.
- Second home: often 10%. See Second Home vs Investment Property.
What putting less down actually costs
Less down means a bigger loan and, usually, mortgage insurance:
- On conventional loans under 20% down, private mortgage insurance is added, and it can be removed later. See What Is PMI and How Do I Get Rid of It?.
- On FHA, there is an upfront premium plus an annual premium, and depending on the down payment it may last for the life of the loan. See How Long FHA Mortgage Insurance Lasts.
- On VA, there is no monthly mortgage insurance, but there is a funding fee unless you are exempt. See VA Funding Fee Explained.
Here is the part people miss: waiting to save 20% is often more expensive than buying with less. Prices and rents keep moving while you save. Run both paths with real numbers before you decide.
The cash you need beyond the down payment
The down payment is not your total cash to close. Budget for:
- Closing costs: lender fees, title and escrow, recording, appraisal. See Arizona Closing Costs: Who Pays What.
- Prepaids: the first year of homeowners insurance, some months of property tax and insurance to fund your escrow account, and daily interest to the end of the month you close.
- Earnest money at contract, which is credited back at closing. See Earnest Money in Arizona.
- Reserves, if your program requires money left over after closing.
- Inspection and appraisal paid before closing.
Sellers can contribute to many of these costs, within limits that depend on the program and down payment. See Seller Concession Limits by Loan Type.
Where the money can come from
Your own savings and checking, retirement accounts in many cases, proceeds from selling a home, and gift funds from family, documented correctly. The documentation is where files go wrong: cash deposits and unexplained transfers create conditions. See Down Payment Gift Funds Rules.
Arizona also has down payment assistance programs with their own income limits and terms. Those terms change, so get them from the program directly and have your lender confirm current eligibility before you plan around one.
Why ask me
- I answer the question before I sell you anything. If renting, waiting or a different program is the better move, I will say so.
- Real numbers, not a calculator guess. I price your actual scenario, side by side, with the fees on the page.
- Every program under one roof. Conventional, FHA, VA, jumbo, and non-QM options like bank statement, DSCR and asset-based loans, so the program fits you instead of the other way around.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending, NMLS #173141, lending in Arizona since 1999 and a 2025 Presidents Club Winner at CMG Home Loans. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
More plain-English answers in the Mortgage Education library.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Program guidelines, eligibility requirements and documentation standards vary by investor and change over time. Rates, terms and program guidelines change and depend on credit approval, property appraisal and other qualifying factors. Not all applicants will qualify. This is not legal or tax advice; consult a qualified professional about your own situation.
Find out which program actually costs you less
FHA, conventional and jumbo price the same borrower very differently once the mortgage insurance is compared across the years you will own the home. Tell me the shape of your file and I will run them side by side.
Looking at a specific home? Send me the address and I will run the numbers: rickykhamis.com/analyze
