Introduction
One of the biggest hurdles to homeownership is saving for a down payment, which is why so many buyers ask how much down payment is required for an FHA loan. FHA financing offers one of the lowest down payment requirements available, making it a go-to solution for first-time buyers and those with limited savings. Elite Mortgage in Yuma, AZ specialises in helping buyers put together their down payment strategy.
3.5% for Scores of 580 and Above
With a FICO score of 580 or better, the FHA allows a minimum down payment of just 3.5% of the purchase price. On a $250,000 home in Yuma, AZ, that translates to only $8,750 down — far more accessible than the 5%–20% required by most conventional lenders.
10% for Scores of 500–579
Borrowers with FICO scores between 500 and 579 are required to contribute at least 10% of the purchase price as a down payment. While this is higher than the standard FHA minimum, it is still lower than many conventional alternatives for borrowers in this credit range.
Acceptable Sources of Down Payment Funds
FHA guidelines allow a variety of funding sources: personal savings, checking or investment accounts, gift funds from family members (documented with a gift letter), and down payment assistance programs (DPAs). Importantly, borrowed funds from unsecured loans are not permitted.
Down Payment Assistance Programs in Arizona
Arizona offers several DPA programs that can cover part or all of the FHA down payment. Programs like the Arizona Industrial Development Authority’s HOME+PLUS program provide down payment and closing cost assistance to eligible buyers. Elite Mortgage works with multiple DPA programs to help reduce your upfront costs.
Closing Costs Are Separate From the Down Payment
Remember that closing costs (typically 2–5% of the loan amount) are in addition to the down payment. FHA allows sellers to contribute up to 6% of the sale price toward the buyer’s closing costs, which can significantly reduce the total cash needed at closing.