Can I Buy a Home with 3.5% Down? Here’s What You Need to Know

One of the most common questions I hear from buyers is: "Can I really buy a home with just 3.5% down?" The short answer is yes! As a Utah Real Estate Specialist with over 15 years of experience, a licensed Broker at Fitness Realty, and someone who has helped more than 500 families (with 225+ five-star reviews), Ive guided many clients through the process of buying a home with a low down paymentand Im here to break down what you need to know.

FHA Loans: The 3.5% Down Option

The most popular way to buy a home with 3.5% down is through an FHA loan. FHA (Federal Housing Administration) loans are designed to make homeownership more accessible, especially for first-time buyers or those with less-than-perfect credit. Heres what you should know:

• Low Down Payment: You only need 3.5% of the purchase price as your down payment.
• Flexible Credit Requirements: FHA loans are more forgiving of lower credit scores than many conventional loans.
• Primary Residence Only: The home must be your primary residence, not a vacation or investment property.
• Mortgage Insurance: FHA loans require mortgage insurance, which adds to your monthly payment.

What Does 3.5% Down Look Like?

For a $400,000 home, 3.5% down equals $14,000. Youll also need to budget for closing costs, which are typically 2-5% of the purchase price. Some buyers use gift funds or down payment assistance programs to help cover these costs.

Is 3.5% Down Right for You?

Buying with a low down payment can be a great option, but its important to consider your overall financial picture. I always recommend talking with a trusted lender to explore your options and make sure youre comfortable with your monthly payment and long-term goals.

Your Homeownership Resource

With 15+ years of experience and deep knowledge of Utah real estate, Im here to answer your questions and guide you every step of the way. If youre curious about buying with 3.5% down or want to explore your options, lets connect and make your homeownership dreams a reality!