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The FHA down payment is officially called the minimum required investment (MRI), and in 2026 it is 3.5% of the adjusted value for borrowers with a credit score of 580 or higher, or 10% for scores between 500 and 579. Adjusted value means the lesser of the purchase price or the appraised value — FHA never lends against a price the appraisal does not support.
What 3.5% looks like in dollars
| Purchase price | 3.5% down (580+) | 10% down (500–579) | Base loan at 3.5% |
|---|---|---|---|
| $250,000 | $8,750 | $25,000 | $241,250 |
| $300,000 | $10,500 | $30,000 | $289,500 |
| $350,000 | $12,250 | $35,000 | $337,750 |
| $450,000 | $15,750 | $45,000 | $434,250 |
| $541,287 (2026 floor limit) | $18,945 | $54,129 | $522,342 |
Add the 1.75% upfront mortgage insurance premium, which is normally financed on top of the base loan rather than paid in cash. Details are on the MIP page.
Where the down payment can come from
FHA is unusually flexible about the *source* of the money — far more so than conventional financing. Acceptable sources include:
- Your own savings, documented with two months of statements
- A gift from a family member, employer, labor union, close friend with a clearly defined interest in the borrower, charitable organization, or governmental entity — see the gift funds guide
- Down payment assistance from a state or local housing agency, or an FHA-compatible second lien — see down payment assistance
- The sale of an asset you own — a car, a coin collection, a second property — with proof of ownership and proof of sale
- A 401(k) loan or retirement withdrawal, documented with terms and receipt of funds
- Cash saved at home, though it requires a documented saving pattern and is the hardest source to use in practice
What cannot be used: unsecured personal loans, credit card advances, cash from the seller or anyone else with an interest in the sale (other than permitted concessions), or funds from an undisclosed source. Every dollar has to be traceable, which is why large unexplained deposits are the single most common underwriting condition on FHA files.
Seasoning and large deposits
Underwriters review at least two months of asset statements. Any deposit that is large relative to your income and not clearly payroll gets a source of funds condition: where it came from, and proof of the transfer from the originating account. Plan for this by moving down payment money into one account 60+ days before applying and leaving it alone.
How borrowers get to zero out of pocket
The 3.5% is mandatory, but it does not have to be *your* 3.5%. In practice there are three levers:
- Cover the down payment with a documented gift or a DPA second lien.
- Cover the closing costs with seller concessions, which FHA permits up to 6% of the sales price, or with a lender credit priced into the rate.
- Cover the prepaid escrows — taxes and insurance collected at closing — from the same concession or credit.
Stack those and the wire to the title company can be close to nothing. See the FHA down payment assistance page for how the second lien is structured, and the closing costs breakdown for what the 6% actually has to absorb.
Down payment and credit score interact
A 580 score is the line between 3.5% and 10%. That single point of score can be worth over $20,000 in cash on a $350,000 home, which is why we push borrowers sitting at 575 to fix the score first rather than find the money. The realistic 30 to 60 day levers are on the credit score requirements page.
Below 500, FHA financing is not available at any down payment.
Does a larger down payment help?
Two things change as you put more down:
- Below 10% down: more money down lowers the loan amount and the payment, but the annual mortgage insurance premium stays for the life of the loan on a 30-year term.
- At 10% or more down: the annual MIP falls off after 11 years on a 30-year loan. For borrowers who plan to keep the mortgage long term, that threshold is often worth more than the payment difference.
For a like-for-like comparison against a 5% conventional loan with cancellable PMI, use the FHA vs conventional page.
Non-occupant co-borrowers
A qualifying family member who will not live in the home can be added to strengthen the file. When the co-borrower is not a family member, the required investment increases to 25%. This is a rule that surprises people every year, so confirm the relationship before you build a plan around a co-signer.
Authoritative sources
Down payment and MRI rules come from HUD Handbook 4000.1, published by the U.S. Department of Housing and Urban Development at hud.gov. Consumer-side explanations of down payments and closing costs are published by the Consumer Financial Protection Bureau. Figures on this page are current for the 2026 program year and reviewed monthly.