The short version: in Virginia, most first-time buyers put down somewhere between 0% and 5%, not 20%. FHA loans start at 3.5% down. Conventional loans for first-time buyers can start at 3% down. VA loans and USDA rural loans allow 0% down for eligible borrowers. Virginia Housing offers a true grant for the down payment when paired with one of their loans. The 20% rule you have heard about is for avoiding mortgage insurance, not for qualifying to buy.
How much do you actually need to put down on a house in Virginia?
There is no single answer, because the minimum is set by the loan program, not by Virginia. The most common paths for first-time buyers in Northern Virginia fall into a narrow band: 0%, 3%, or 3.5% down. A 20% down payment is one option, but it is not the bar to clear in order to buy. It is the threshold that lets you skip private mortgage insurance on a conventional loan. Two different decisions, often confused. In practice, most first-time buyers I work with in Fairfax, Alexandria, and Annandale put down far less than 20% and use mortgage insurance as the price of getting into the home sooner. Whether that is the right call depends on your savings, your timeline, and how long you plan to stay in the home.
FHA loan: 3.5% down with a 580 credit score
FHA loans, insured by the Federal Housing Administration, are designed to lower the barrier for first-time buyers. The minimum down payment is 3.5% of the purchase price if your credit score is 580 or higher. If your score is between 500 and 579, the minimum jumps to 10% down, per HUD's official program rules. On a $500,000 home in Fairfax County, that is $17,500 at 3.5%. The down payment can come from your own savings, an eligible gift from a family member, or an approved down-payment assistance program. FHA loans carry mortgage insurance (an upfront premium plus an annual premium) for the life of the loan in most cases. That is the trade for the low down payment. Whether FHA is the right fit depends on your credit profile and how long you plan to keep the loan.
Conventional loan: 3% down for qualifying first-time buyers
Conventional loans are the non-government-insured option, sold to Fannie Mae and Freddie Mac. The standard down payment is 5%, but two specific programs let qualifying first-time buyers put down just 3%: Fannie Mae's HomeReady and Freddie Mac's Home Possible. Both are aimed at low-to-moderate-income borrowers and have income limits tied to the area median income for the property's location. On a $500,000 Annandale home, 3% is $15,000. You will pay private mortgage insurance (PMI) until you reach roughly 20% equity, but conventional PMI can be cancelled later, which is a meaningful difference from FHA. Credit and debt-to-income requirements are typically stricter than FHA. For buyers with stronger credit, conventional often costs less over time even at a low down payment.
VA loan: 0% down for eligible service members and veterans
If you are an active-duty service member, veteran, or eligible surviving spouse, the VA loan is usually the strongest option available. It allows 0% down, charges no monthly mortgage insurance, and has flexible credit guidelines. Northern Virginia has one of the highest concentrations of military and veteran homebuyers in the country, so this comes up constantly in my work. The VA charges a one-time funding fee that can be rolled into the loan; the exact percentage depends on whether it is your first use of the benefit and your down-payment amount. Full eligibility and current funding fee tables live at the VA's official home loan page. If you have ever served, ask about VA before any other product. The benefit is meaningful.
USDA loan: 0% down in eligible rural areas
USDA loans, backed by the U.S. Department of Agriculture, allow 0% down for low-to-moderate-income borrowers buying in designated rural areas. Most of inner Northern Virginia (Alexandria, Arlington, Fairfax City, Annandale) is not USDA-eligible. Once you get further out (parts of Loudoun, Fauquier, and points west), eligibility opens up. You can check any address against the USDA's eligibility map. If you are willing to live further from the urban core and the property qualifies, USDA is worth a look. It carries a guarantee fee and an annual fee instead of traditional mortgage insurance.
Virginia Housing programs that help with the down payment
Virginia Housing (formerly VHDA) is the state housing authority, and they run several programs that stack on top of a regular loan to help with the cash needed at closing. The two most useful for first-time buyers in Northern Virginia:
- Down Payment Assistance Grant. A true grant (no repayment) that can be applied to your down payment when paired with an eligible Virginia Housing loan.
- Closing Cost Assistance Grant. A separate grant that can be applied to closing costs, the VA funding fee, or the USDA guarantee fee, when paired with a Virginia Housing VA or USDA loan.
Virginia Housing also offers a Mortgage Credit Certificate (a federal income-tax credit on a portion of mortgage interest paid) and a free homebuyer course that is required for these programs. Grant amounts, income limits, sales price limits, and current eligibility rules change. Anyone considering these should confirm current terms directly with Virginia Housing or with me before counting on a specific dollar amount.
Side-by-side: minimum down payment by loan type
| Loan type | Minimum down payment | Credit score floor (typical) | Mortgage insurance | Best for |
|---|---|---|---|---|
| FHA | 3.5% (10% if score 500-579) | 580 | Upfront + annual, usually for life of loan | Buyers with lower credit or thinner savings |
| Conventional (HomeReady / Home Possible) | 3% | 620 | PMI, cancellable around 20% equity | First-time buyers with solid credit, income within program limits |
| Conventional (standard) | 5% | 620 | PMI, cancellable around 20% equity | Buyers above program income limits |
| VA | 0% | No VA-set minimum (lenders set theirs) | None (funding fee instead, one-time) | Eligible service members, veterans, surviving spouses |
| USDA | 0% | 640 (typical) | Guarantee fee + annual fee | Eligible rural addresses, income within program limits |
Where the down payment can come from
Most loan programs accept funds from sources beyond your own checking account, which matters a lot for first-time buyers stretching to get in. The common eligible sources are: your own seasoned savings (in your account typically 60 days), a documented gift from an immediate family member, proceeds from the sale of another asset, certain retirement-account withdrawals, and approved down-payment assistance programs like Virginia Housing's grants. Each source has paper-trail requirements. A gift, for example, needs a signed gift letter from the donor stating the funds are a gift and not a loan. If you are planning to use gift funds, tell your loan officer early. Plan-ahead beats scrambling at the closing table.
Why 20% down is a myth for most first-time buyers
The 20% rule comes from one specific thing: avoiding private mortgage insurance on a conventional loan. It is not a qualification threshold, and it never has been. The U.S. median first-time buyer puts down a fraction of that. In a market like Northern Virginia, waiting until you have 20% saved often means watching prices rise faster than your savings. The honest math is this: figure out what monthly payment you can sustain, work backward to a price range, and use the down-payment program that fits your situation. For most first-time buyers I see, that is FHA at 3.5% or conventional at 3-5%, sometimes paired with Virginia Housing's grant. Mortgage insurance is the cost of starting sooner. Whether it makes sense depends on your numbers, not on a rule of thumb.
Closing costs sit on top of the down payment
The down payment is not the only cash you bring to closing. Closing costs in Northern Virginia generally run somewhere between roughly 2% and 5% of the purchase price, and include lender fees, title insurance, recording fees, prepaid taxes and insurance, and the funding of an escrow account. On a $500,000 Alexandria home, that is a range of about $10,000 to $25,000 on top of the down payment, depending on the loan type and the deal. Some of it is negotiable, and seller credits can offset part of it in the right market. Virginia Housing's Closing Cost Assistance Grant can also offset part of it when paired with a Virginia Housing loan. I will walk you through your specific numbers when we look at a property together. The CFPB's Loan Estimate guide is a useful primer on how to read these fees on a real disclosure.
What to do next
If you are anywhere in the Annandale, Alexandria, Fairfax, or broader Northern Virginia market and you are trying to figure out what down payment you actually need for the home you want, the next step is a conversation about your specific situation: your credit, your savings, your timeline, and your eligibility for VA, USDA, or Virginia Housing programs. Pre-approval is free, it does not commit you to anything, and it tells you exactly which loan options and price ranges fit. Get in touch and we can map out the right path.
Frequently asked questions about down payments in Virginia
Is there a first-time home buyer program in Virginia with no down payment?
Yes, in two main paths. Eligible service members, veterans, and surviving spouses can use a VA loan with 0% down. Eligible buyers purchasing in a USDA-designated rural area can use a USDA loan with 0% down. If neither applies, the next-lowest options are FHA at 3.5% down or conventional HomeReady / Home Possible at 3% down, and Virginia Housing's Down Payment Assistance Grant can further reduce the cash you bring.
What credit score do I need to put down 3.5% on an FHA loan in Virginia?
FHA's official minimum for 3.5% down is a 580 credit score, per HUD. Many lenders set higher overlays (often 600 or 620), and your full file (credit history, debt-to-income, employment) matters as much as the raw score. Below 580, FHA still allows the loan with 10% down. The best step is a pre-approval review of your actual credit report.
Can I use gift money for my down payment in Virginia?
Yes, on most loan programs, including FHA, conventional, VA, and USDA. The funds need to come from an immediate family member (or another eligible source defined by the program), and the donor signs a gift letter stating the money is a gift and not a loan. The gift funds also need a clear paper trail showing they moved from the donor to the buyer. Tell your loan officer early so we set up the documentation correctly.
Do I need 20% down to avoid PMI in Virginia?
To avoid PMI on a conventional loan, yes, you typically need 20% down at closing or you need to reach roughly 20% equity later (PMI on a standard conventional loan can be cancelled once you reach that threshold). VA loans have no monthly mortgage insurance at all. FHA loans have FHA mortgage insurance regardless of down payment. So 20% is only the PMI-avoidance number on conventional, not a universal rule.
How much do I need to save for a $500,000 home in Northern Virginia?
As an illustration, not a quote: at 3.5% down on FHA, the down payment alone is $17,500. Closing costs typically add another 2-5% of the price, which is $10,000 to $25,000. So you are planning for roughly $27,500 to $42,500 in cash for that price point, before any seller credits, Virginia Housing grant, or lender credit. The exact number depends on the loan program and the deal. Run a personalized estimate before you assume.
Can I combine Virginia Housing's grant with an FHA or VA loan?
Virginia Housing's grants are designed to pair with eligible Virginia Housing loans, which include their conventional, FHA, VA, and USDA options. So in practice, yes: a Virginia Housing FHA loan, for example, can carry the Down Payment Assistance Grant. The grant pairs with the Virginia Housing version of the loan, not with a non-Virginia-Housing loan from another lender. Confirm the current terms with Virginia Housing or with me before counting on a specific grant amount.