Conventional loans can require as little as 3% down. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs allow 3% down for buyers earning up to 80% of the area median income, with cheaper mortgage insurance. Without an income limit, 3% down conventional loans are also available when at least one borrower is a first-time buyer.
The options
| Program | Down payment | Who it’s for |
|---|---|---|
| HomeReady (Fannie Mae) | 3% | Income up to 80% of area median; first-time or repeat buyers |
| Home Possible (Freddie Mac) | 3% | Income up to 80% of area median |
| Standard 97% loan-to-value | 3% | At least one first-time buyer, no income limit |
| Standard conventional | 5% | Anyone who qualifies |
Why HomeReady and Home Possible can be cheaper
These programs require less mortgage insurance coverage, which lowers PMI, and offer better pricing at lower credit scores. HomeReady can also count income from a boarder or roommate in some cases. A homebuyer education course is usually required for first-time buyers.
Try it: PMI calculatorSee what mortgage insurance would cost at 3%, 5% and 10% down with your credit score.3% conventional vs. 3.5% FHA
- Conventional usually wins with a credit score above about 680 to 700: lower insurance that can be removed.
- FHA can win with lower scores or higher debt ratios.
Run both with FHA vs. conventional.
Combine with assistance
Many down payment assistance programs pair with HomeReady and Home Possible, so the 3% itself can come from a grant or forgivable loan. Gifts from family are also allowed; see using gift money.
Check your income against the limit
Area median incomes differ widely, so the 80% limit can be quite high in expensive metros. Lenders can check the limit for a specific property address. Then see what you can afford with the affordability calculator.
Common questions
Can I get a conventional loan with 3% down?
Yes, through HomeReady or Home Possible if your income is within 80% of the area median, or a standard 3% down loan if at least one borrower is a first-time buyer.
Is 3% down conventional better than FHA?
Usually with a credit score above about 680 to 700, because PMI is cheaper and can be removed.
Can my 3% down payment be a gift?
Yes, gifts from family and down payment assistance can generally cover it.
Updated October 2026. Educational content. OfferBacked is not currently a lender and doesn’t issue pre-approvals or loans.