Down Payment Decoded

Your Down Payment Options by Loan Type

Conventional Loans:

• Minimum: 3% down (first-time buyers via Conventional 97 or HomeReady/HomeOne)
• Standard: 5–10% down. No PMI threshold: 20% down
• Best for: buyers with 700+ credit scores and stable income

FHA Loans:

• Minimum: 3.5% down (credit score 580+); 10% down (credit score 500–579)
• Requires mortgage insurance premium (MIP) for life of loan if under 10% down
• Best for: buyers with lower credit scores or limited savings

VA Loans: 0% down, no PMI ever. Best for: veterans, active duty military, surviving spouses.

USDA Loans: 0% down, income limits apply. Many Emerald Coast and Atlanta suburban communities qualify. Best for: moderate-income buyers in eligible areas.

FHA vs. Conventional — Which Is Right for You?

Choose FHA if: Your credit score is below 680, you have limited savings, higher debt-to-income ratio, or past credit challenges.

FHA costs to know:

• Upfront mortgage insurance premium (UFMIP): 1.75% of loan amount (rolled into loan)
• Annual MIP: 0.55–1.05% depending on down payment and loan term
• MIP stays for life of loan if you put less than 10% down

Choose Conventional if: Your credit score is 680+, you can put at least 5% down, and you want to cancel PMI once you reach 20% equity.

Conventional PMI costs: Typically 0.5–1.5% of loan amount annually. Automatically cancels at 78% LTV. Can request cancellation at 80% LTV.

The long-term math: On a $300,000 loan, FHA MIP at 0.55% = $137.50/month forever. Conventional PMI at 0.8% = $200/month but cancels when you hit 20% equity.