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Saving for a Down Payment: Practical Ways to Get There

Saving for a down payment is one of the biggest hurdles to buying a home, and many buyers think they need far more than they do. Here’s how much you may actually need, where help can come from and practical ways to build your savings.

Reviewed by Patriot Home Mortgage compliance, October 2026 · 3 min read

You may need less than you think

Twenty percent down is a common myth. It’s the point where a conventional loan no longer needs mortgage insurance, not a requirement. Depending on the loan:

Loan Minimum down payment
VA None in most cases, for eligible borrowers
USDA None in most cases, in eligible areas and within income limits
FHA 3.5% with a credit score of 580 or higher; 10% from 500 to 579
Conventional As little as 3% for some buyers

A smaller down payment means a larger loan and, on most loans, mortgage insurance. A loan officer can show you how different down payments change your monthly payment and total cost.

Don’t forget closing costs

Besides the down payment, you’ll pay closing costs for things like the appraisal, title insurance and lender fees. Your Loan Estimate lists them. In some cases, the seller can pay part of them, and some loans let certain costs be added to the loan.

Down payment assistance

Many state and local housing agencies offer grants or second loans to help with a down payment or closing costs, often for first-time buyers or buyers within income limits. Your loan officer can tell you which programs are available in your state.

Gift funds

Most loan programs allow a gift from family toward your down payment. Expect to:

  • Provide a signed gift letter stating the money is a gift, not a loan
  • Show the money moving from the giver’s account to yours
  • Follow your loan program’s rules about who can give

Talk to your loan officer before the money moves so the paperwork lines up.

Practical ways to save

  • Automate it. Set up an automatic transfer to a separate savings account each payday.
  • Track your spending. A month of tracking often shows easy places to cut, like unused subscriptions or frequent takeout.
  • Hold off on new car payments. A car payment cuts into both your savings and the loan amount you qualify for.
  • Save windfalls. Tax refunds, bonuses and cash gifts can add up quickly.
  • Pay down high-interest debt. It frees up money each month and can improve your debt-to-income ratio.

Retirement accounts

Some retirement plans allow loans or withdrawals for a home purchase, but there can be taxes, penalties and long-term costs. Talk to your plan administrator or a tax professional before using retirement savings.

Start the conversation early. A loan officer can tell you which loans you may qualify for and how much you may actually need to save, which is often less than buyers expect.

Talk to a Patriot loan officer

Every situation is different, and a short conversation is the quickest way to know what fits yours.

Find a loan officerSee where we lend

This article is general information, not an offer to lend or a commitment to lend. All loans are subject to credit approval, underwriting and property valuation. Belem Servicing LLC, NMLS ID #715386 (NMLS Consumer Access).

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