According to Lending Tree, the average down payment for a house in the US is about 12.29%. Now, I wouldn’t necessarily accept that as the most common down payment, for instance almost 25% of mortgages are FHA loans which only require 3.5% down. The problem with 12.29% is that all it is an average; it covers up large differences between different types of mortgages. For instance in large, expensive areas like New York City, and Washington D.C. down payments of 40% on very expensive property throw off the averages, and skew them badly. What’s really important for a potential borrower is not the US national average down payment, but what the minimum down payment is for the types of loans you are qualified to get.
Many banks and institutions would like a borrower to make a 20% down payment when purchasing a home. For most borrowers 20% is simply unrealistic; that percentage would require a down payment of $40k on a $200k loan. I doubt many current home owners could afford to make that payment when they purchased their home.
That’s why we have organizations like the FHA and Fannie Mae that provide other down payment options for potential borrowers. Here are some common requirements for those types of loans:
Federal Housing Administration (FHA) – the FHA down payment requirements are about 3.5% on a loan. For many borrowers that is very workable, and is probably the reason the FHA underwrites such a large amount of today’s loans.
Fannie Mae and Freddie Mac – The typical down payment on a house from these corporations is about 10%. There are special program that allow borrowers to make loan with much smaller down payment, but they have other requirements.
Veteran’s Administration (VA) – as a special service to former military members, the VA offers 0% down payment loans. Obviously, to take advantage you would need to be a former military member.
United States Department of Agriculture (USDA) – the USDA Rural Development program offers many loans with no down payment at all. However, they have strict location requirements, if you happen to be in a qualifying area; however, they can be the best loan available.
WalletHub Answers is a free service that helps consumers access financial information. Information on WalletHub Answers is provided “as is” and should not be considered financial, legal or investment advice. WalletHub is not a financial advisor, law firm, “lawyer referral service,” or a substitute for a financial advisor, attorney, or law firm. You may want to hire a professional before making any decision. WalletHub does not endorse any particular contributors and cannot guarantee the quality or reliability of any information posted. The helpfulness of a financial advisor's answer is not indicative of future advisor performance.
WalletHub members have a wealth of knowledge to share, and we encourage everyone to do so while respecting our content guidelines. This question was posted by a WalletHub user. Please keep in mind that editorial and user-generated content on this page is not reviewed or otherwise endorsed by any financial institution. In addition, it is not a financial institution’s responsibility to ensure all posts and questions are answered.
Ad Disclosure: Certain offers that appear on this site originate from paying advertisers, and this will be noted on an offer’s details page using the designation "Sponsored", where applicable. Advertising may impact how and where products appear on this site (including, for example, the order in which they appear). At WalletHub we try to present a wide array of offers, but our offers do not represent all financial services companies or products.