FHA Loan Down Payment: How Much You Need

The minimum FHA loan down payment is 3.5% of the home’s price if your credit score is 580 or higher. With a score from 500 to 579, the minimum rises to 10%, and with a score below 500 you aren’t eligible for an FHA loan. On a $350,000 home, that works out to $12,250 or $35,000.

The money doesn’t have to come from your own savings. A gift from family, help from an employer, or a government down payment program can cover some or all of it. However, the seller and anyone else who profits from the sale can’t pay it. Below are the dollar amounts, the sources FHA accepts and the costs on top.

FHA loan down payment: the quick answer

HUD, which runs the FHA program, calls the down payment the Minimum Required Investment (MRI). Under HUD Handbook 4000.1, the MRI is at least 3.5% of the Adjusted Value. For a purchase, that is the lower of the price (less any inducements) or the appraised value.

Your credit score sets how much you need:

• 580 or higher: 3.5% down, the maximum financing FHA allows.
• 500 to 579: 10% down, because the loan is capped at 90% of the home’s value.
• Below 500: not eligible for an FHA loan.

These are FHA’s minimums. However, a lender can set a higher score floor of its own, called an overlay, so one lender may decline a 560 score that another accepts. Also, the whole 3.5% can be a gift.

FHA down payment requirements by credit score

The FHA minimum down payment changes with your score, as the table shows for buying a home you will live in.

Loan-to-value (LTV) is the loan amount divided by the home’s value. Source: HUD 4000.1, sections II.A.1.b.ii(A)(3), II.A.2.b.i and II.A.2.b.ii (Update 18).

Which credit score FHA uses

FHA uses a figure called the Minimum Decision Credit Score (MDCS). When your credit report shows three scores, the middle one counts. If two borrowers apply together, the lower of their two scores sets the down payment for the loan.

So say one buyer has a middle score of 600 and the co-borrower has 570. The loan falls in the 500 to 579 band, and the pair needs 10% down. For FHA case numbers assigned on or after January 1, 2027, lenders may also use VantageScore 4.0 or FICO 10T, but HUD’s Mortgagee Letter 2026-11 keeps the 580 and 500 cutoffs the same.

How much is 3.5% down on an FHA loan?

Here is the FHA loan down payment at three example prices, assuming each home appraises at or above the price.

Mortgage insurance comes on top: an upfront premium of 1.75% of the base loan, which you can finance into the loan, plus an annual premium of 0.55% with less than 5% down or 0.50% with 5% or more down on most 30-year loans (see our FHA MIP chart).

For context, the National Association of Realtors put the median existing-home price at $417,500 in September 2026. At that price, 3.5% down is $14,612.50 and 10% down is $41,750. In addition, the loan must fit under the FHA loan limit for your county, which starts at $541,287 for a one-unit home.

When the appraisal comes in low

Because the 3.5% applies to the lower of price or value, a low appraisal raises your cash needs. For example, say you agree to pay $350,000 and the home appraises at $340,000. FHA caps the base loan at 96.5% of $340,000, which is $328,100. As a result, you would need $21,900 to cover the gap between the loan and the price, instead of $12,250.

So you could ask the seller to cut the price or bring more cash. Our guide to a low appraisal covers the options.

Where your FHA loan down payment can come from

FHA lets the down payment come from many places, as long as the lender can document where the money started. Each source below comes from HUD 4000.1, section II.A.4.d (II.A.5.c for manually underwritten loans).

Savings and checking accounts

Money in your own bank accounts is the simplest source, so the lender just reviews your recent statements. However, any single deposit larger than 50% of your total monthly income needs documentation showing where it came from.

Cash kept at home can count too, but only after you deposit it in a bank or with the escrow or title company. Then you explain in writing how and over what period you saved it. Finally, the lender decides whether that story fits your income and spending history.

FHA down payment gift

A gift can cover the entire FHA down payment. According to HUD 4000.1, section II.A.4.d.iii(F), these donors can give it:

• A family member.
• Your employer or labor union.
• A close friend with a clearly defined and documented interest in you.
• A charitable organization.
• A government agency or public entity with a homeownership program for low- or moderate-income families or first-time buyers.

The donor and you both sign a gift letter. It must list the donor’s name, address and phone number, their relationship to you, the dollar amount, and a statement that you don’t have to repay it. The lender also needs proof of the transfer, such as the donor’s bank statement showing the withdrawal plus your deposit, or a wire or cashier’s check to the closing agent.

However, the donor can’t give cash from a drawer or safe, because FHA bars cash on hand as a source of gift funds. Also, if you buy from a relative, only a family member can give you a gift of equity, a credit for part of the home’s equity.

Retirement accounts and 401(k) loans

You can withdraw money from an IRA or 401(k), or borrow against a 401(k). For a withdrawal, the lender generally counts up to 60% of the account value (less any existing loan), unless you show you can take out more after taxes and penalties. If you use it to close, the lender needs proof you cashed it out.

A 401(k) loan also works, although the lender subtracts the loan balance from the account value when it counts your assets. Before you tap retirement savings, read our guide to a 401(k) loan for down payment, which covers the repayment and tax risks.

Other accepted sources

• Employer assistance: an employer program can pay any part of the down payment or closing costs, although a salary advance doesn’t count.
• Sale of personal property: you can sell a car or collectibles, as long as you document the value, the bill of sale and the deposit.
• Loans secured by your own assets: for example, a loan against your CD or brokerage account from an independent lender.
• Private savings clubs: money from a member-run savings pool, with its ledgers and receipts.
• Disaster relief grants: government grants for people displaced by a natural disaster.

What FHA does not allow

• Money from the seller, agent, builder, lender or anyone else who profits from the sale, including seller credits (a seller’s real estate tax proration credit is a narrow exception).
• Unsecured loans, such as personal loans or credit card cash advances.
• A salary advance from your employer.
• Cash on hand that you can’t deposit and explain.
• Closing costs, prepaid items and other fees. They can’t count toward the 3.5%. However, if you paid some closing costs early with your own funds and an interested-party credit reimburses you at closing, that refund can count.

Help with the FHA down payment

State housing finance agencies, cities and counties run down payment assistance (DPA) programs that work with FHA loans. Some give grants, while others make a second loan, which may be forgivable or deferred. Our guide to FHA down payment assistance explains how these programs work and who qualifies.

Under FHA rules, a second loan from a government agency can cover your 3.5%. By contrast, a second loan from a HUD-approved nonprofit can’t go toward the 3.5%, though a nonprofit’s gift can. HUD’s FHA loans page for buyers also links to state and local programs.

FHA loan down payment vs. closing costs and MIP

Your FHA loan down payment is only part of the cash you bring to closing. HUD 4000.1 treats closing costs as a separate piece that can’t count toward the 3.5%.

Closing costs and seller help

Closing costs include the lender’s fees, title and appraisal charges, and prepaid items such as homeowners insurance, property taxes and interest. The total varies by lender, loan amount and location, so compare the Loan Estimates you get from each lender.

The seller and other interested parties can pay up to 6% of the sales price toward these costs, discount points and the upfront mortgage insurance premium, and never more than your actual costs. On a $350,000 home, that cap is $21,000. Still, none of it can go toward the down payment. Our page on seller contribution limits compares FHA with other loan types.

Mortgage insurance

FHA purchase loans carry mortgage insurance premiums (MIP). The upfront premium is 1.75% of the base loan, and you can add it to the loan. On the $350,000 example with 3.5% down, that adds about $5,910, for a total loan of $343,660.

Your down payment also sets how long the annual MIP lasts. With 10% or more down, it ends after 11 years. With less than 10% down, it lasts for the life of the loan. Putting down at least 5% also lowers the annual rate from 0.55% to 0.50% on most 30-year loans (HUD 4000.1, Appendix 1.0).

FHA vs. conventional down payment

A conventional loan can require less down than FHA, but the rules differ. Here is how the two compare for a one-unit home you will live in.

Sources: Fannie Mae Eligibility Matrix and Selling Guide B3-4.3-04; CFPB on PMI removal.

With a lower credit score, FHA is often the easier approval. With a higher score, conventional PMI may cost less and can come off later. For the full comparison, see FHA vs. conventional loan. For VA, USDA and other options, see how much a down payment on a house is by loan type.

FHA loan down payment FAQ

What is the minimum down payment for an FHA loan?

The FHA minimum down payment is 3.5% with a credit score of 580 or higher. With a score from 500 to 579, it is 10%, and with a score below 500 you aren’t eligible for an FHA loan.

How much down do first-time home buyers need with an FHA loan?

First-time buyers follow the same 3.5% or 10% rule, because FHA has no separate first-time buyer down payment. However, many state and local assistance programs target first-time buyers.

Can my whole FHA down payment be a gift?

Yes. A family member, employer, labor union, close friend with a documented interest in you, charity or government program can give all of it. You’ll need a signed gift letter and proof that the money moved from the donor to you or to the closing agent.

Can you get an FHA loan with no down payment?

FHA’s standard purchase loan has no zero-down option. The one exception is Section 203(h) for victims of a presidentially declared disaster. Still, a gift or a government down payment program can supply the full 3.5%, so some buyers close without using their own savings for it.

Is it worth putting more than 3.5% down on an FHA loan?

It can be. With 5% or more down, the annual MIP drops from 0.55% to 0.50% on most 30-year loans. Also, with 10% or more down, MIP ends after 11 years instead of lasting for the life of the loan.

Plan your FHA down payment

Start with your credit score, because it decides whether you need 3.5% or 10%. Then add up your cash, any gift you expect and any program you may qualify for. Finally, ask a lender to price the loan with closing costs and MIP, so you know your total cash to close before you make an offer.