Can you buy a home with only 3% down?

Yes, you can buy a home with 3% down if you meet certain requirements.¹ Mortgages that accept 3% down make buying a home more accessible for first-time buyers and low- to moderate-income households, but they also come with trade-offs. Learn more about a 3% down mortgage, who qualifies, what it costs, and how to decide if it’s right for you.

Key takeaways:

• Many programs offer mortgages with a minimum down payment of 3%.
• To buy a home with a low minimum down payment, you'll need to meet specific financial requirements.
• Home buyers should understand the additional costs associated with a smaller down payment.

What is a 3% down mortgage?

A 3 percent down mortgage is one in which you pay 3% of the home’s purchase price up front. The remaining 97% you borrow from a mortgage lender.

The down payment can come from personal savings, a grant, gift funds, or another approved form of down payment assistance.

With only a few exceptions, 3% is the minimum down payment accepted.

Let’s see what a 3% down payment looks like in real numbers.

What's required to get a 3% down payment mortgage?

Each type of 3 down mortgage has its own eligibility criteria, but they are similar in many ways. Here are some common traits among them.

Maximum loan amount

Many low-down-payment programs have maximum loan limits. Conforming loans have a maximum limit that varies by county and the number of units the home has.

The Federal Housing Finance Agency sets a baseline conforming loan limit that applies in most counties and a high-cost limit that applies in counties with higher cost of living, as well as in Alaska, Hawaii, Guam, and the U.S. Virgin Islands.

Credit history

Lenders will review your credit history and, depending on which type of loan you're applying for, may require you to meet a minimum credit score.

Fixed-rate conforming conventional loans require a minimum down payment of 3%. Fannie Mae and Freddie Mac, which buy conforming loans from lenders, dropped in 2025 their requirement of a minimum 620 credit score, instead requiring lenders to evaluate applicants' entire credit history.

Many 3% down payment assistance programs have a minimum credit score to buy a house. Typically, they want to see a score of at least 620.

Another red flag is any serious past credit issues, such as a foreclosure or bankruptcy.

Other loan types, such as VA loans, require no minimum credit score.

Low debt-to-income ratio (DTI)

Your debt-to-income ratio (DTI) measures how much of your monthly income goes toward paying your debts, such as rent, auto loans, student loans, credit card payments, child or spousal support, and similar obligations.

To calculate your DTI, divide your total monthly debt payments by your gross monthly income, then multiply by 100 to get a percentage. Here’s an example:

$2,000 (monthly debt payments) / $5,000 (gross monthly income) = 0.4 x 100 = 40%

So what is a good DTI? To qualify for a mortgage, lenders typically require a DTI of 43% or less, although exceptions apply.

First-time home buyers

There are many low-down-payment mortgages and assistance programs for first-time buyers.

But here’s the thing – first-time home buyer doesn’t necessarily mean that you’ve never bought or owned a home. According to U.S. Department of Housing and Urban Development (HUD) guidance, you may qualify as a first-time buyer if you or your spouse haven’t owned a primary residence during the past 3 years, as of the purchase date of your new property.

There are a range of other circumstances that may meet first-time homebuyer down payment requirements. If you are:

• A single parent who only owned a property while married to a former spouse.
• A displaced homemaker who only owned a property with a spouse.
• Someone who owned only a primary residence not permanently affixed to a foundation.
• Someone who owned a property not in compliance with state or local building codes and which cannot be repaired for less than the cost of building a permanent structure.

Primary residence

Many types of 3 down payment mortgage require the property you're buying to be your primary residence. This means you plan to live in the home, and you are not buying it as an investment property or a vacation home.

Types of 3% down payment mortgages

Here are 3% down payment mortgage programs helping to create new homeowners.

Conventional 97 loan

The conventional 97 loan, sometimes called a 97% loan-to-value (LTV) loan, allows you to purchase a home with 3% down if you meet certain qualifications. This program is a type of conforming conventional loan and is backed by Fannie Mae.

You may want to pursue this program if you don't have much savings for a down payment and are a first-time buyer. These loans have competitive interest rates and offer flexibility in sourcing down payments.

There are criteria for qualifying, however. They typically include:

• Minimum 3% down payment
• Minimum credit score of 620
• Fixed-rate mortgage only
• Loan within conforming limits
• Property used as a primary residence
• First-time buyer requirements in many situations
• Mortgage insurance is required with less than 20% down

Fannie Mae HomeReady®

HomeReady® is a Fannie Mae program that helps low- and moderate-income borrowers achieve homeownership.² While both HomeReady® and Conventional 97 loans allow a 3% down payment, HomeReady® targets buyers with specific income levels and may offer greater flexibility.

The two programs also have differing mortgage insurance requirements. In addition, the ideal HomeReady® candidates plan to have supplemental boarder or rental income.

Here are typical eligibility requirements for the HomeReady® program:

• Minimum 3% down payment
• Minimum credit score of 620
• Income limits of 80% of the area median income (AMI)
• Completion of first-time home buyer classes when required
• Primary residence occupancy
• Conforming loan limits

Freddie Mac HomeOne®

The HomeOne® program is a Freddie Mac program for first-time buyers.

The program offers fixed-rate mortgages for the purchase of one-unit primary residences. There are no income limits, but a home buyer education course is required when all borrowers are first-time buyers, and you must pay for PMI until you have at least 20% equity.

Here are typical eligibility requirements for a HomeOne® loan:

• Minimum 3% down payment
• Typically requires a minimum credit score of 620
• At least one borrower must be a first-time home buyer.
• Fixed-rate purchase and refinance loans only.³
• Completion of homeownership education when required
• Primary residence occupancy
• Conforming loan limits

Freddie Mac Home Possible®

Freddie Mac’s Home Possible® program is another 3% down payment option for those who qualify. It also helps low- and moderate-income borrowers buy homes with limited savings. It's open to those looking to buy single-family homes, manufactured housing, and energy-efficient properties, as well as those who want to make renovations to condo units.

Here are typical eligibility requirements for the Home Possible® program:

• Minimum 3% down payment
• Credit score of at least 660
• Income limitations of 80% of the area median income (AMI)
• Primary residence requirement
• Homeownership education in some cases

Additional low-down-payment mortgages

The above is not the end of options for buying low down payment homes.

FHA loan

FHA loans have a slightly higher down payment floor of 3.5%. FHA loans are insured by the Federal Housing Administration and, in addition to low down payment requirements, have low closing costs and more flexible credit qualifying.

They are often used by borrowers with lower credit scores or limited savings, either of which can make it difficult to qualify for a conventional loan.

Here are typical eligibility requirements for FHA loans.

• Minimum 3.5% down payment
• 580 to qualify for 3.5% down with lenders, including Rocket Mortgage.⁴
• Property used as primary residence
• Up-front and annual mortgage insurance premium (MIP)
• Steady income

VA loan

VA loans allow borrowers to make no down payment.⁵ However, these loans are only available to veterans, active-duty military personnel, National Guard and Reserve members, and certain surviving spouses. There are also minimum duty requirements.

There are also many types of VA loans. These include home purchases, cash-out refinances, Interest Rate Reduction Refinance Loans (IRRRLs),⁶ and Native American Direct Loans (NADL).

Here are the general eligibility requirements:

• Qualifying military service
• No minimum credit score; however, some lenders want at least 620
• Certificate of eligibility (COE) from the Department of Veterans Affairs
• Primary residence occupancy

USDA loan

This is another government-backed program that allows a no-down-payment option under certain circumstances. USDA loans help eligible borrowers buy homes in qualifying rural and suburban areas and offer many advantages.

Here are the typical qualifying criteria:

• Homes must be in an eligible rural area
• A credit score of at least 640, with some lenders going as low as 580
• DTI of 40% or less
• Income must not exceed 115% of the area’s median income.
• The home cannot be a working farm.

Rocket Mortgage currently doesn't offer USDA loans.

At a glance: Low-down-payment home loan options

Here are the key features of the various loan programs.

*Credit score requirements often vary by lender.

Pros and cons of a 3% down mortgage

Buying a home with a low down payment is not all upside. Both advantages and disadvantages should be carefully weighed.

Pros

• A low down payment makes homeownership more accessible. A low down payment mortgage allows you to buy sooner by significantly reducing the amount of money you’ll need up front. Buying a home sooner also means that you’ll start building home equity immediately and enjoy any appreciation of your new home.
• Can be combined with additional assistance programs. If you qualify for any additional grants or low-cost loans, combining a 3% down payment program and another down payment assistance program can make buying a home extremely affordable.

Cons

• Higher interest costs. Putting less money down means borrowing more. That results in you paying more mortgage interest over the life of your loan, making it potentially more expensive. It also often means a larger monthly payment than if you put down a larger down payment.
• PMI costs. Borrowers who put less than 20% down on a conventional loan are typically required to pay private mortgage insurance (PMI). This is an insurance designed to protect the lender in case you default. You pay it every month as part of your mortgage payment. PMI typically costs from 0.3% to 1.5% of the original loan balance annually.

FAQ

Let’s tackle some common questions about 3% down payment programs.

Can I get a mortgage with only 3% down?

Absolutely. Many conventional mortgage programs allow qualified borrowers to buy a home with just 3% down, provided they meet the lender's eligibility requirements. Most are targeted toward first-time home buyers and low- and middle-income households.

How much is a 3% down payment?

A 3% down payment equals 3% of the home's purchase price. For example, if you agree to pay $400,000 for a home, it requires a $12,000 down payment. You can use the down payment calculator from Rocket Mortgage to figure out the down payment on a home of any price.

What is the minimum down payment to buy a house?

How much you’ll need to put down to buy a house depends on many variables, including the loan program, your credit history, income, and other factors. That said, some programs, such as VA and USDA loans, require no down payment if you qualify. Other down payment assistance loan programs have 3% down options, and FHA loans can be as low as 3.5% down.

The bottom line: 3% down mortgages make homeownership more accessible

Many programs offer 3% down payment mortgages, which can make homeownership possible sooner. These programs are generally targeted to first-time buyers and low- and moderate-income households. Other specialized programs, such as VA and USDA loans, require no down payment if you qualify.

However, there are costs associated with these programs, such as PMI. Putting less down to buy a home also means you must finance more. That can result in higher interest costs over the life of the loan and a higher monthly payment.

These costs should be weighed carefully against the benefits of buying a home sooner, which include building equity right away and enjoying any gains in the real estate market.

When you’re ready to buy, explore your borrowing options with Rocket Mortgage.

¹ The 3% down payment option is only available on certain conventional loan products and is not available in all states. Additional terms and conditions may apply.

² Client will receive a 1 point (1.000) loan level price adjustment (LLPA) credit on HomeReady and Home Possible purchase loans locked on or after January 2, 2024. One point (1.000) is equal to 1% of the loan amount. Minimum credit amount will be $2,000. Maximum loan amount is $350,000. Offer is not available with any other discounts or promotions. Offer cannot be retroactively applied to previously closed loans or loans already in process; offer is not transferable. Rocket Mortgage reserves the right to cancel/modify this offer at any time. Additional restrictions/conditions may apply. This is not a commitment to lend.

³ Refinancing may increase finance charges over the life of the loan.

⁴ To qualify for this offer, you must meet all standard FHA eligibility requirements. In addition, your total mortgage payment, including taxes and insurance, cannot exceed 38% of your income, your debt-to-income (DTI) ratio cannot exceed 45%, and you must have 12 months of verifiable housing history immediately prior to your application, no late payments 30 days or greater in the last 12-months, and no derogatory marks on your credit report. Not available on jumbo loans. Asset statements may be needed, no more than 1 day of non-sufficient fund fees are allowed in the most recent 2 months prior to application. Additional restrictions/conditions may apply.

⁵ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.

⁶ The VA Streamline program may have stricter requirements in some states. In order to qualify for the VA Streamline program, you must have a VA loan. The VA Streamline is only available on primary residences. Cash-out transactions are not allowed. In order to qualify for a VA Streamline, a 0.5% minimum reduction in interest rate on the previous fixed-rate loan must occur if the new loan will be a fixed rate or a 2% minimum reduction in interest rate on previous adjustable rate mortgage loan must occur; a minimum of 6 months of consecutive mortgage payments must be paid on the current loan at the time of application. Some states may require an appraisal. Additional restrictions/conditions may apply.