By Homecrest Guide Editorial Team · September 30
Saving 20% for a home in Washington, DC can take a decade at a typical savings rate. Fortunately, most DC buyers don’t put down anywhere near that much. Several loan programs allow a down payment of 5%, 3%, or even 0%, each with different trade-offs in cost, eligibility and mortgage insurance.
Quick answer: DC buyers with limited savings generally have four main paths to a low down payment: FHA loans (3.5% down), conventional loans through first-time buyer programs (as low as 3% down), VA loans (0% down, for eligible veterans and service members), and DC-specific down payment assistance programs that can reduce the cash needed even further. Each comes with different mortgage insurance costs and long-term trade-offs. Read more in How to Save for a Down Payment in DC: Practical Strategies
In this guide
- Comparing the main low-down-payment options
- FHA: 3.5% down
- Conventional 3% down programs
- VA loans: 0% down for eligible buyers
- DC assistance programs stacked on top of these loans
- The trade-off: lower down payment vs mortgage insurance cost
- How to choose the right option for you
- FAQs
Comparing the main low-down-payment options
| Option | Minimum down payment | Mortgage insurance | Best fit |
|---|---|---|---|
| FHA loan | 3.5% | MIP, often life of loan under 10% down | Buyers with credit in the 580–680 range |
| Conventional 3% down programs | 3% | PMI, removable at 20% equity | Buyers with 620+ credit and limited savings |
| VA loan | 0% | None | Eligible veterans and service members |
| DC assistance programs (paired with above) | Can reduce cash needed further | Depends on the base loan used | Income-eligible first-time buyers |
FHA: 3.5% down
FHA loans remain one of the most accessible options for buyers with a credit score of at least 580, requiring a 3.5% down payment.
On a $420,000 home: a 3.5% down payment is $14,700.
Trade-off: FHA’s mortgage insurance (MIP) often lasts for the life of the loan with less than 10% down, which is the main long-term cost to weigh against the low upfront requirement. Read more in FHA Loan Requirements and Limits in Washington, DC
Conventional 3% down programs
Several conventional loan programs allow down payments as low as 3%, often specifically designed for first-time homebuyers or moderate-income borrowers. These typically require:
- A credit score of at least 620, though better pricing usually starts around 680+.
- Completion of a homebuyer education course in some cases.
- Income limits in some versions of these programs, though not all conventional 3%-down options are income-restricted.
On a $420,000 home: a 3% down payment is $12,600 — slightly less cash needed than FHA’s 3.5%.
Trade-off: PMI applies, but unlike FHA’s MIP, it can be removed once you reach 20% equity, which often makes this option cheaper over the long run for buyers with solid credit.
VA loans: 0% down for eligible buyers
For eligible veterans, active-duty service members and certain surviving spouses, VA loans require no down payment at all, combined with no monthly mortgage insurance.
On a $420,000 home: a VA loan can require $0 down, though a one-time funding fee typically applies (often financed into the loan, and waived for some disabled veterans).
Trade-off: eligibility is limited to those who meet military service requirements, and a specific building (for condos) must generally be VA-approved. Read more in VA Loan Guide for Veterans Buying in DC (2026)
DC assistance programs stacked on top of these loans
DC’s own down payment assistance programs can be combined with FHA, conventional or (in some structures) other loan types to reduce the cash a buyer needs even further:
- DC Open Doors: provides down payment assistance structured as a second loan, which can significantly reduce or even eliminate the buyer’s own cash contribution toward the down payment, depending on the specific terms.
- Home Purchase Assistance Program (HPAP): offers assistance for income-eligible buyers, which can cover a substantial portion of the down payment and some closing costs.
- Employer-assisted and public-sector programs: some employers and public-sector-specific programs offer additional assistance that can be layered on top of a low-down-payment loan.
Because these programs have income limits and specific eligibility rules, checking them before assuming you need to save the full 3–5% down payment yourself is a worthwhile first step.
The trade-off: lower down payment vs mortgage insurance cost
A smaller down payment gets you into a home sooner, but it typically comes with a cost, either through mortgage insurance or a higher rate. Consider this illustrative comparison on a $420,000 home with a 30-year term. Figures are examples only.
| Down payment | Approx. loan amount | Approx. monthly insurance cost | Notes |
|---|---|---|---|
| 3% (conventional) | $407,400 | about $210/month PMI | Removable at 20% equity |
| 3.5% (FHA) | $405,300 | about $280/month MIP (with upfront MIP financed) | Often life of loan under 10% down |
| 0% (VA, if eligible) | $420,000 | $0/month | One-time funding fee applies |
Illustrative example only. Actual mortgage insurance costs vary by borrower profile and lender.
The «cheapest» option depends entirely on your eligibility, credit score, and how long you plan to keep the loan before refinancing or reaching 20% equity.
How to choose the right option for you
- Check VA eligibility first, if there’s any chance you qualify, since it typically offers the best combination of low upfront cost and no ongoing mortgage insurance. Read more in VA Loan Guide for Veterans Buying in DC (2026)
- Compare your credit score against FHA and conventional minimums. If you’re at 680+, conventional 3% down programs are often the better long-term value due to removable PMI. Read more in FHA vs Conventional Loan in DC: Which Costs Less?
- Check DC assistance program eligibility before finalizing your down payment plan, since qualifying could reduce your needed savings significantly.
- Ask a lender to model your specific numbers across two or three of these options side by side, including the long-term cost of mortgage insurance, not just the upfront down payment.
Next steps
- Identify which programs you’re eligible for based on your credit score, military service (if applicable), and income.
- Ask a lender for a side-by-side comparison of your realistic options, including long-term mortgage insurance costs.
- Check DC assistance program eligibility before assuming you need to save the full down payment yourself.
- Factor in your own savings timeline and comfort level with mortgage insurance when making your final decision. Read more in How to Save for a Down Payment in DC: Practical Strategies
Frequently asked questions
What is the lowest down payment available in DC? VA loans offer 0% down for eligible veterans and service members. Among non-VA options, some conventional first-time buyer programs allow as little as 3% down, slightly below FHA’s 3.5% minimum.
Is a 3% down payment enough to buy in DC? It can be, combined with the right loan program and sufficient income to qualify for the resulting loan amount. Remember to also budget separately for closing costs, which aren’t covered by the down payment itself.
Do low-down-payment loans have higher interest rates? Not necessarily directly tied to the down payment percentage alone, but lower down payments often come with mortgage insurance, which adds to the total monthly cost even if the interest rate itself is similar.
Can I combine a low-down-payment loan with DC assistance programs? In many cases, yes. Programs like DC Open Doors and HPAP are often designed to work alongside FHA or conventional loans, reducing the cash you need to bring on top of the loan’s minimum down payment.
Should I put down more than the minimum if I can afford to? It depends on your goals. Putting down more reduces your loan amount, monthly payment and mortgage insurance cost, but keeping more cash in reserve can also be valuable, especially in an expensive city like DC. Run both scenarios with a lender before deciding.
Disclosure: This article is for educational purposes and isn’t financial advice. Down payment requirements, mortgage insurance costs and program eligibility vary by lender and change over time; confirm current details with a licensed lender before making decisions.