What Down Payment Do First-Time Buyers Actually Need in Arizona?

"You need 20% down to buy a house" is one of the most persistent myths in real estate — and it's especially untrue for first-time Arizona buyers. Here's what borrowers are actually putting down once loan type and assistance programs are factored in.

Conventional Loans: As Low as 3% Down

Many first-time buyers qualify for conventional loan programs with as little as 3% down, provided credit and income meet the lender's guidelines. Private mortgage insurance (PMI) applies below 20% down, but it can typically be removed once you build enough equity.

FHA Loans: 3.5% Down

FHA loans remain one of the most accessible paths for first-time buyers with limited savings or credit history that doesn't meet conventional overlays, requiring around 3.5% down for qualifying credit scores.

VA Loans: 0% Down

Eligible veterans, active-duty service members, and surviving spouses can access VA loans with $0 down and no monthly mortgage insurance — one of the strongest benefits available to Arizona's sizable military community.

Down Payment Assistance: Sometimes $0 Out of Pocket

Layer Home Plus or Home in Five Advantage on top of an FHA or conventional loan, and some qualifying buyers cover their down payment (and sometimes closing costs) with little to no cash out of pocket, subject to program terms and income limits.

So What Should You Actually Budget For?

Realistically, most first-time Arizona buyers land somewhere between 0% and 5% down once loan type and available assistance are factored in — not the 20% many assume is required. The right number for you depends on your credit, income, and which programs you qualify for.

AZ Mortgage connects first-time Arizona buyers with lending partners who can run your specific numbers across FHA, conventional, VA, and down payment assistance options side by side — at no cost and with no obligation.