 TITLE: How Do Down Payments Work? CONTENT: What Is a Typical Down Payment on a House?\n------------------------------------------\nWithin regulated limits, mortgage lenders exercise wide leeway in setting down payment requirements for users with different credit qualifications, just as they do with interest rates and fees. But federal housing programs and industry guidelines make several general practices nearly universal among U.S. home lenders:\n*   While they regularly accept down payments of less than 20%, mortgage lenders nearly all require borrowers to buy private mortgage insurance (PMI) on such loans. Lenders require PMI because they consider it risky to provide a loan for more than 80% of a home's market value. If PMI premiums are required on your mortgage, they'll increase your monthly mortgage payments, but you can have them lifted once you've paid off 20% of the principal on your mortgage loan. For this reason, it's a good idea to try to make your mortgage down payment as close to 20% as you can manage.\n*   First-time homebuyers with FICO® Scores☉ of 580 or higher can make down payments as low as 3.5% on a mortgage backed by the Federal Housing Administration—an FHA loan. Borrowers with credit scores as low as 500 can qualify for FHA loans with a 10% down payment.\n*   Qualifying veterans, service members and surviving spouses can buy homes with no down payment at all through a VA loan backed by the U.S. Department of Veterans Affairs. END