Buying Any Property With Less Than 20% Down

Owner-Occupied and Investment Property Loan Options Explained

Many home buyers believe they need 20% down to buy a home.
This is one of the most common — and most expensive — myths in real estate.

In reality, both first-time and repeat buyers can purchase primary residences, second homes, and investment properties with far less than 20% down. In some cases, buyers can even purchase with 0% down.

This guide explains down payment requirements by loan type, making it an easy reference for current and future home buyers.

FHA Loans: 3.5% Down for First-Time and Repeat Buyers

FHA loans are one of the most widely used low down payment mortgage options.

• Minimum down payment: 3.5%

• Minimum FICO for 3.5% down: 580

• Available to: First-time and repeat buyers

• Occupancy: Primary residence only

FHA Down Payment Assistance (DPA)

Many FHA buyers also qualify for down payment assistance programs.

• Minimum FICO for FHA DPA: 620

• Assistance programs may cover some or all of the 3.5% down payment

• Availability depends on income, location, and program guidelines

Conventional Loans With Less Than 20% Down

Standard Conventional Loans

Conventional financing offers low down payment options without FHA mortgage insurance.

• First-time home buyers: 3% down

• Repeat buyers: 5% down

• Occupancy: Primary residence

Affordable Conventional Programs (Fannie Mae & Freddie Mac)

Fannie Mae and Freddie Mac offer specialized programs for buyers who meet income limits:

• Fannie Mae HomeReady®

• Freddie Mac Home Possible®

• Minimum down payment: 3%

• Available to first-time and repeat buyers

Income Limit Lookup Tools:

• Fannie Mae HomeReady income limits:
  https://ami-lookup-tool.fanniemae.com/

• Freddie Mac Home Possible income limits:
  https://sf.freddiemac.com/working-with-us/affordable-lending/home-possible

These lookup tools allow buyers to verify eligibility by address, household size, and income.

USDA Loans: 0% Down for Eligible Buyers

USDA loans allow qualified buyers to purchase with no down payment.

• Down payment: 0%

• Available to: First-time and repeat buyers

• Occupancy: Primary residence

• Requirements:

  • Property must be in a USDA-eligible area

  • Household income must be below USDA income limits

  • Property must meet USDA standards

USDA Eligibility Tools:

• USDA property eligibility map:
  https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

• USDA income limits lookup:
  https://www.rd.usda.gov/programs-services/single-family-housing-programs/income-eligibility

USDA loans are one of the most powerful zero-down mortgage options available today.

VA Loans: 0% Down for Veterans and Service Members

VA loans offer unmatched benefits for eligible borrowers.

• Down payment: 0%

• Available to: Veterans, active-duty service members, and surviving spouses

• First-time and repeat buyers

• No monthly mortgage insurance

• Occupancy: Primary residence

VA loans remain one of the strongest purchase loan programs in the market.

Jumbo Loans With Less Than 20% Down

High loan amounts do not always require large down payments.

• Typical down payment: 10%

• Some programs allow: 5% down

• Occupancy: Primary and second homes

• Guidelines depend on credit, income, and asset strength

Jumbo financing is far more flexible than most buyers realize.

Non-QM Loans: Flexible Down Payment Options

Non-QM loans serve borrowers with non-traditional income documentation.

• Typical minimum down payment: 10%

• Some programs allow less than 20% down

• Available to: First-time and repeat buyers

• Common for self-employed and real estate investors

Non-QM lending expands access to homeownership beyond standard guidelines.

Investment Property Loans: As Little as 15% Down

Buyers can enter the real estate investor space with less capital than expected.

• Minimum down payment: 15%

• Options for both first-time and experienced investors

• Available for single-family, condo, and small multifamily properties

Investment property financing continues to evolve with competitive options.

Key Takeaway: 20% Down Is NOT Required

Whether you’re buying:

• A primary residence

• A second home

• Or an investment property

There are many loan programs that allow buyers to purchase with far less than 20% down.

Understanding your options is the key to making confident, informed decisions.

Why Buyers Choose Northeast Financial

With a trusted reputation and deep expertise across FHA, Conventional, USDA, VA, Jumbo, Non-QM, and investment loans, Northeast Financial is the only choice for purchase home financing advice.

Our team educates buyers, explains options clearly, and helps structure the best loan for each unique situation — now and in the future.

If you’re planning to buy a home or investment property, Northeast Financial is ready to help.