Down Payment Guidefor Arizona Buyers

It depends on the loan. Conventional loans start at 3% down through special programs: Fannie Mae HomeReady and Freddie Mac Home Possible cap household income at 80% of the area median, and Freddie Mac HomeOne offers 3% to first-time buyers with no income cap. FHA needs 3.5% down with a 580+ credit score (a 500-579 score still qualifies with 10% down). VA and USDA loans require no down payment at all for eligible buyers. Most first-time buyers land somewhere in between — the median down payment was 9% in NAR's 2026 survey.

Yes — two government-backed programs are built for it. VA loans require no down payment for veterans, service members, and some surviving spouses. USDA loans finance the full price of a home in eligible rural and suburban areas. Arizona's down payment assistance can also cover your cash to close: the statewide HOME Plus program offers up to 4% of the loan amount, and city programs like Phoenix Open Doors reach up to 10% of the purchase price for qualifying buyers.

Private mortgage insurance (PMI) is the monthly fee conventional lenders charge when your down payment is under 20%. You can avoid it by putting 20% down, using a VA loan (which never charges monthly mortgage insurance), or choosing a lender-paid arrangement that trades a higher rate for no monthly PMI. And it doesn't last forever: you can request cancellation once your balance reaches 80% of the home's original value (you'll need to be current on payments with no junior liens), and your servicer must end it automatically at 78% — 22% equity — even if you never ask.

Programs that help cover your down payment or closing costs — usually as a forgivable second loan, a grant, or a deferred loan with no monthly payments. Arizona's statewide program is HOME Plus, run by the Arizona Industrial Development Authority (AzIDA) and listed by the Arizona Department of Housing: up to 4% of your loan, fully forgiven after five years if you stay in the home. City and county programs exist too — Phoenix Open Doors, Tucson/Pima County DPA, and Home in Five Advantage in Maricopa County. Most require income limits and a homebuyer education course, and many are limited to first-time buyers.

Yes. On an FHA loan, your entire 3.5% minimum investment can come from a gift — from a family member, your employer, a close friend with a documented relationship, a charity, or a government assistance program. Conventional loans allow gifts to cover the full down payment on a primary-residence loan too. You'll sign a gift letter stating the money never has to be repaid, and your lender documents the transfer from the giver's account.

Twenty percent is a rule of thumb. Putting 20% down avoids monthly mortgage insurance on a conventional loan — that's the real reason people repeat it. But it's not a requirement: you can buy with as little as 0-3.5% down depending on the loan. Most buyers don't reach 20% either — the median first-time buyer put 9% down in NAR's 2026 survey.

Work backward from your target loan type. On a $300,000 home: 3% down is $9,000, 3.5% down (FHA) is $10,500, 10% down is $30,000, and 20% down is $60,000. Then budget another 2-5% of the purchase price for closing costs — $6,000 to $15,000 on that same home. Many buyers land between minimum-down and 20%, balancing cash kept in savings against a lower monthly payment.

Usually a little — less than most people expect. A bigger down payment lowers the loan-to-value ratio lenders price on, and crossing 20% also removes PMI, which is usually the bigger monthly win. On Fannie Mae's pricing grid, credit score moves your rate far more than down payment does, and the very best pricing sits at 25% down and above. Compare total costs, not just the rate.

Seasoned funds are money that has been sitting in your account across the bank statements your lender reviews — usually the last two months. Money that has been there a while raises no questions. A large fresh deposit gets a look: HUD asks lenders to document any single deposit over 50% of your monthly qualifying income, so be ready to show where it came from. A documented gift, a payroll deposit, or a verified transfer all pass easily.

There's no single right answer — it depends on your savings, income stability, and what else the money could do. A larger down payment locks in a lower monthly payment, and crossing 20% on a conventional loan removes PMI (on the pricing grid, credit score moves your rate more than down payment does). Invested money can outperform your mortgage rate over time, but returns aren't guaranteed while the payment savings are. Keep an emergency fund first, then pick what lets you sleep at night.