How Much Down Payment Do I Really Need to Buy a Home in Arizona?
The "you need 20% down" rule is wrong for most buyers. The minimum is much lower — sometimes zero — depending on which loan type you use. Here's the actual menu.
Minimum down payment by loan type
| Loan type | Min down | Notes |
|---|---|---|
| VA | 0% | Active-duty military, veterans, surviving spouses |
| USDA Rural Development | 0% | Specific eligible rural / suburban areas; income limits apply |
| FHA | 3.5% | FICO 580+; widely available |
| Conventional 97 (FHFA) | 3% | FICO 620+; eligible buyers, primary residence |
| Conventional with PMI | 5% | FICO 620+; mortgage insurance required <20% down |
| Conventional, no PMI | 20% | The famous "20%" — no PMI, but most buyers don't have it saved |
| Jumbo | 10–25% | Loan amounts above conforming limits |
Where the "20%" rule came from
20% down avoids private mortgage insurance (PMI) on a conventional loan. PMI is roughly 0.3–1.0% per year of the loan, depending on FICO and LTV. So 20% down saves you the PMI — but if you have to wait 5 extra years to save 20% while home prices appreciate, the math usually doesn't favor waiting.
For most first-time buyers, putting 3–5% down with PMI and buying now beats waiting to save 20%. The PMI drops off automatically when you reach 22% equity.
Where DPA fits in
Down payment assistance is essentially a way to bridge the gap between what you have saved and the program's minimum down. With DPA, you can effectively bring your out-of-pocket down payment to $0 or close to it — even on programs that nominally require 3.5% or 5% down.
Example: FHA loan requires 3.5% down. You have $0 saved. A 5% DPA covers the 3.5% down plus some closing costs. You bring almost nothing to closing — you just pay a slightly higher first-mortgage rate to fund the assistance. Full DPA basics →
How to figure out your number
Three inputs:
- Loan amount you'd qualify for (income, DTI, credit dependent).
- Loan type you'll use (VA, FHA, conventional, USDA).
- Whether you'll use DPA.
From there, the math is:
Cash to close = (Down payment) + (Closing costs) − (DPA assistance) − (Seller credits)
Next step
Bring your numbers and we'll show you four scenarios side-by-side: 0% down VA (if eligible), 3.5% FHA, 5% conventional, and FHA-with-DPA. You'll see exactly what each costs at closing and per month.
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