Down Payment on a House in Arizona 2026: What You Need
Down Payment
Down Payment on a House in Arizona 2026: How Much You Actually Need
Twenty percent down is a choice, not a rule. Here is what each loan actually requires, what it means in dollars on a Phoenix price, and what the extra cash buys you.
The short answer
Most Arizona buyers need 0% to 5% down, not 20%. VA and USDA allow 0% for eligible buyers, Fannie Mae 97% options, HomeReady and Freddie Mac Home Possible allow 3%, and FHA allows 3.5% with a 580 score. On the $454,699 median sale price Redfin reported for the city of Phoenix in August 2026, 3.5% down is about $15,914. Nationally, NAR reported a 10% median down payment for first time buyers in its 2025 buyer profile.
You do not need 20 percent down to buy a house in Arizona. The loan programs available in 2026 start at zero for eligible buyers and 3 percent for most others. The 20 percent figure matters for one thing, avoiding mortgage insurance on a conventional loan, and it keeps a lot of otherwise qualified buyers renting longer than they need to. This guide shows what each program requires, what it means in dollars on a real Phoenix price, and how lenders check the money. Our Arizona first time home buyer guide covers the rest of the first purchase.
For context, the National Association of Realtors reported in its 2025 Profile of Home Buyers and Sellers, released November 4, 2025, that the median down payment was 10% for first time buyers and 23% for repeat buyers. Repeat buyers usually roll equity from a home they sold, so if you are buying your first place, compare yourself with the first time number, and remember that a median is not a minimum.
How much you actually need to put down
For most buyers the honest answer is 0% to 5%, depending on the loan you qualify for. Arizona has no state minimum. The down payment comes down to the loan program, your credit score, and whether the home will be your primary residence, a second home or an investment.
Minimum down payment by loan type in 2026
| Loan type | Minimum down | Notes |
|---|---|---|
| VA | 0% | Eligible veterans, service members and some surviving spouses, when the price is at or below appraised value; no monthly mortgage insurance |
| USDA | 0% | Eligible addresses only, with household income at or below 115% of the area median |
| Conventional 97, HomeReady, Home Possible | 3% | One unit primary home; the standard 97% option generally needs a first time buyer, HomeReady and Home Possible use an 80% of area median income limit |
| FHA | 3.5% with a 580 score; 10% from 500 to 579 | Primary residence; upfront and annual mortgage insurance |
| Conventional, standard | 5% | Most standard purchase loans on a primary home |
| Conventional, second home | 10% | Fannie Mae maximum 90% loan to value |
| Conventional, investment property | 15% | Fannie Mae maximum 85% loan to value on a one unit purchase |
| Jumbo, DSCR, bank statement | Set by each investor | Varies by program, credit and reserves; ask for current terms |
Sources for each row are listed at the bottom of this post. The 2026 conforming loan limit for conventional loans is $832,750 in every Arizona county per the Federal Housing Finance Agency; above that, see our jumbo loans page. For each program on its own, see our pages on FHA loans, conventional loans and VA loans, and our post on USDA loans in Arizona.
What that looks like on a Phoenix price
Redfin reported a $454,699 median sale price for the city of Phoenix for August 2026, on a three month rolling basis. Here is what each down payment level means on that price:
| Down payment | Cash down on $454,699 |
|---|---|
| 3% conventional | About $13,641 |
| 3.5% FHA | About $15,914 |
| 5% conventional | About $22,735 |
| 10% | About $45,470 |
| 20% | About $90,940 |
The gap between 3% and 20% on the same house is more than $77,000. For many first time buyers, that gap is years of saving, which is the real decision hiding inside the 20% question.
Twenty percent down buys you out of mortgage insurance. It does not buy you the house any sooner.
What 20 percent down actually gets you
Two things: no mortgage insurance on a conventional loan, and a smaller loan. On a conventional loan, the Consumer Financial Protection Bureau explains that you can ask to cancel private mortgage insurance when your balance is scheduled to reach 80% of the original value, and it ends automatically at 78% if you are current. FHA is different. Under HUD Mortgagee Letter 2023-05, putting less than 10% down on FHA keeps the annual premium for the life of the loan, and 10% or more ends it after 11 years. Our guide to PMI cost in Arizona shows what mortgage insurance adds each month, and FHA vs conventional compares the two.
A bigger down payment can also improve pricing. Fannie Mae's loan level price adjustments step down across loan to value bands, including at 80%, 75% and 60%, but credit score usually moves the price more, so do not drain your savings for a small rate improvement. Keep reserves; see how many months of reserves lenders want.
Run your own numbers
Arizona mortgage calculator
- Principal and interest$2,969
- Property tax (est. 0.51%)$193
- Homeowners insurance (est.)$183
- Mortgage insurance$198
- Loan amount$432,250
Estimates only, not a quote or a commitment to lend. Property tax uses Arizona's average effective rate and varies by county and assessment. Insurance is an estimate and Arizona premiums have been rising. HOA dues are not included. Your actual rate depends on credit, loan to value, occupancy, and program.
Want these numbers to be real instead of estimated? We will price your exact scenario across every lender we work with.
Get my real numbersWhere the down payment money can come from
More places than most buyers expect. Documented gifts from family are allowed on conventional, FHA, VA and USDA loans for a primary home; Fannie Mae Selling Guide B3-4.3-04 requires no minimum contribution from your own funds on a one unit principal residence. Our gift funds guide covers the letter and the paper trail. Retirement savings are another source; read using your 401k to buy a house for the loan versus withdrawal trade. Buying from a relative can use a gift of equity. Arizona also has down payment assistance through programs such as HOME Plus and Home in Five for buyers within their limits.
Blake's take: down payment assistance usually comes with a higher interest rate, so your monthly payment is often higher than with a traditional loan. For most buyers a traditional low down payment loan is the better deal: FHA with 3.5% down, Conventional 97, HomeReady or Home Possible with 3% down, and VA or USDA with 0% down for eligible buyers. Compare both monthly payments before you choose DPA. Current program terms are in our Arizona down payment assistance guide.
Not sure how much to put down? Send your price range and savings. We will price 3%, 5%, 10% and 20% side by side so you see the monthly cost of keeping cash in the bank.
Compare my options Book a 15 minute callHow lenders check your down payment
Lenders verify where the money came from. For a purchase, Fannie Mae Selling Guide B3-4.2-01 calls for bank statements covering the most recent full two month period of account activity, or the most recent quarter if the account reports quarterly. Large deposits that are not payroll need a paper trail, and cash deposited without one can become a problem at underwriting. Start documenting early and keep the money in one account. Our post on what not to do before closing lists the money moves that cause trouble.
Plan for closing costs on top of the down payment. In Maricopa County, First American lists an escrow fee of about $1,624 and a lender's title policy of about $1,365 on a $500,000 purchase, and our closing costs guide walks through the rest, including how seller credits can cover part of it. Then set your price range with our home affordability guide, get a mortgage pre-approval, and browse active Valley listings on Arizona Luxury Property Search.
Honest caveat: program minimums, loan limits and lender requirements change, and lenders can set stricter rules than the agencies. Median figures describe what buyers did, not what you must do. This is general education, not a commitment to lend. See our loan programs or our process.
Sources (each last verified October 26, 2026)
- National Association of Realtors, 2025 Profile of Home Buyers and Sellers, released November 4, 2025 (median down payment 10% first time, 23% repeat)
- Redfin Data Center, city of Phoenix median sale price $454,699, August 2026, three month rolling
- HUD Handbook 4000.1, Section II.A (FHA 3.5% and 10% down); HUD Mortgagee Letter 2023-05 (FHA premium duration)
- VA, VA purchase loan; USDA Single Family Housing Guaranteed Loan Program
- Fannie Mae Eligibility Matrix (second home 90% and one unit investment purchase 85% maximum loan to value); Fannie Mae 97% LTV Options FAQs; Freddie Mac Home Possible; Selling Guide B3-4.3-04, Personal Gifts, February 4, 2026; B3-4.2-01, Verification of Deposits and Assets, May 4, 2022
- FHFA, Conforming Loan Limit Values for 2026; CFPB, When can I remove PMI
- First American Title, Homebuyer's Guide to Closing Costs in Arizona, rates effective April 1, 2024
Frequently asked questions
Can I buy a house in Arizona with no money down?
Yes, if you qualify for a VA loan or a USDA loan. VA requires eligible military service, and USDA requires an eligible address and household income at or below 115% of the area median. Both allow 100% financing.
Is 5 percent down enough to buy a house in Phoenix?
For most buyers, yes. A 5% conventional down payment on the $454,699 Phoenix median sale price Redfin reported for August 2026 is about $22,735. You pay private mortgage insurance until you can cancel it, which you can request at 80% of the original value.
What is the average down payment for a first time buyer?
Nationally, NAR's 2025 Profile of Home Buyers and Sellers, released November 4, 2025, reported a 10% median down payment for first time buyers and 23% for repeat buyers. Programs allow far less: 0% on VA and USDA, 3% on conventional 97 and 3.5% on FHA.
Does a bigger down payment get me a better mortgage rate?
Usually a little. Fannie Mae loan level price adjustments step down across loan to value bands, including at 80%, 75% and 60%, but credit score usually moves the price more, so keep enough savings for reserves.
Do I need money for closing costs on top of the down payment?
Yes. In Maricopa County, First American lists an escrow fee of about $1,624 and a lender's title policy of about $1,365 on a $500,000 purchase, plus lender fees and prepaid taxes and insurance. Seller credits can cover part of it within each loan type's limit.
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Pillar Mortgage Group, LLC is a licensed mortgage brokerage based in Scottsdale, AZ. Company NMLS# 2700076 | Arizona License MB-2009671 | Equal Housing Lender.
9089 E Bahia Dr 101A, Scottsdale, AZ 85260
This content is for informational and educational purposes only and does not constitute financial, legal, or tax advice. Mortgage rates, loan programs, and market conditions are subject to change without notice. Not a commitment to lend. All loans subject to credit approval. Third-party market data sourced from publicly available information. Pillar Mortgage Group conducts business in accordance with the Fair Housing Act and the Equal Credit Opportunity Act.
