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Minimum down payment is 3.5%
For most borrowers, the FHA requires a down payment of just 3.5% of the purchase price of the home. That's a "huge attraction," says Dennis Geist, senior director of compliance and fair lending at Treliant Risk Advisors and formerly a vice president of government programs for another lender. In late 2014, Fannie Mae and Freddie Mac reduced minimum down payments to 3% from 10%, but such loans have limited availability.
FHA borrowers can use their own savings to make the down payment. But other allowed sources of cash include a gift from a family member or a grant from a state or local government down-payment assistance program.
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