To secure a home loan with a minimal down payment, consider federal programs like FHA loans (3.5% down for credit scores ≥580), VA loans (0% down for qualified veterans), and USDA loans (0-6% down for rural areas). conventional loans typically require 5-20% down, but private mortgage insurance (PMI) may reduce this to 3% for loans under 20%. Borrowers should aim to keep their debt-to-income (DTI) ratio below 43% and credit scores above 620. The maximum loan amount depends on local conforming limits (up to $920,300 in most areas) and individual affordability. A rule of thumb is to borrow no more than 2.5-3 times annual income after taxes.

FHA loans allow 3.5% down with a 580+ credit score, appealing to first-time buyers. VA loans require no down payment but demand a minimum 620 credit score and military service. USDA loans offer 0-6% down for rural properties, targeting lower-income buyers. Conventional loans with 5% down require 620+ scores and 3% PMI. Data from the U.S. Department of Housing and Urban Development (HUD) shows 64% of FHA borrowers in 2022 used 3.5% down, while the National Association of Realtors reports 6% as the average down payment for all buyers. Loan limits are set by Fannie Mae and Freddie Mac at $920,300 in high-cost areas, though most counties cap at $765,600. Borrowers exceeding 43% DTI face higher rates or denial, as 30% of rejected applications in 2023 cited DTI issues per the Consumer Financial Protection Bureau. Lower down payments increase loan costs (e.g., PMI or higher interest rates), but federal programs mitigate this. For example, VA loans save $5,000+ in upfront costs compared to conventional loans with 5% down. Ultimately, balancing down payment size, income, and local market conditions ensures sustainable borrowing.