The typical down payment for a small apartment in the United States ranges from 3.5% to 20%, depending on the loan type and the buyer’s financial situation. First-time buyers or those with lower credit scores may need to put down less but will typically pay for mortgage insurance.

The required down payment varies based on loan programs. For conventional loans, which are not government-insured, a 20% down payment is standard to avoid private mortgage insurance (PMI). However, many buyers opt for lower down payments, such as 5% or 10%, which trigger PMI costs of 0.5% to 1.5% of the loan amount annually. Government-backed loans like FHA mortgages require a minimum 3.5% down payment for properties under $547,200 (as of 2023), with a mortgage insurance premium added to the loan. VA loans, available to qualified veterans, often require no down payment but may include a funding fee. Data from the National Association of Realtors (NAR) shows that the median down payment in the U.S. was 13% in 2022, though this varies by region and loan type. Lenders also consider credit scores, income, and debt-to-income ratios when approving down payment amounts. For example, a borrower with excellent credit and a stable income might qualify for a lower down payment compared to someone with riskier financials. Ultimately, the down payment percentage balances lender risk with buyer affordability, ensuring loans remain sustainable while promoting homeownership. According to the Federal Housing Finance Agency (FHFA), 68% of conventional buyers made a down payment of 5% or less in 2022, reflecting broader accessibility through insurance. Additionally, Fannie Mae’s 2023 guidelines highlight that jumbo loans (over $529,600) may require 10% down, while FHA’s 3.5% threshold applies to single-family homes, including small apartments. These requirements aim to mitigate default risks while accommodating diverse buyer demographics.