How Much Down Payment Do I Need to Buy a Home in Arizona or Nevada?

A practical guide to down payments, cash to close, and preserving financial margin — by Ben Sechena, Mortgage Loan Originator, NMLS 2825684

The short answer

You may not need a 20% down payment to buy a home. Some conventional mortgage options permit as little as 3% down, FHA financing may permit 3.5% down, and eligible VA or USDA borrowers may have a no-down-payment option. Your actual requirement depends on the loan program, property, occupancy, credit, income, assets, and lender guidelines. The better question is not only, “What is the minimum?” It is, “How much can I put down while still covering closing costs and preserving a responsible financial cushion?”

Down payment is not the same as cash to close

The down payment is the portion of the purchase price you contribute rather than finance. Cash to close is broader. It may include the down payment, lender and third-party closing costs, prepaid interest, initial tax and insurance deposits, and other transaction-specific amounts, reduced by eligible credits or deposits already paid.

The Consumer Financial Protection Bureau notes that closing costs, excluding the down payment, often range from approximately 2% to 5% of the purchase price, although actual costs depend on the loan, property, location, lender, and transaction. A buyer who saves only for the advertised minimum down payment can therefore reach the contract stage without enough money for the complete transaction.

What common minimums may look like

Conventional: potentially as little as 3% down

Certain qualified borrowers and programs may permit a 3% down payment. Eligibility, income limits, first-time-buyer rules, mortgage insurance, property type, and underwriting requirements vary by program.

FHA: potentially as little as 3.5% down

FHA financing includes mortgage-insurance requirements and remains subject to FHA and lender guidelines.

VA: potentially no down payment for eligible borrowers

Eligibility, entitlement, appraisal value, funding-fee status, lender requirements, and other rules apply.

USDA: potentially no down payment for qualified borrowers and eligible properties

Household income, property location, occupancy, repayment ability, and other program requirements apply.

These figures are starting points, not promises of approval or a complete comparison of loan costs. A lower down payment may preserve cash, but it can also produce a larger loan balance, a higher monthly payment, and mortgage-insurance or program-related costs. A larger down payment may reduce the loan amount and certain costs, but it also converts liquid savings into home equity.

What the percentages mean on a $400,000 home

3% down: $12,000
3.5% down: $14,000
5% down: $20,000
10% down: $40,000
20% down: $80,000

These examples show only the down payment. They do not include closing costs, prepaid expenses, inspections, moving, repairs, reserves, or other amounts that may be needed before or after closing.

Why 20% is a strategy—not a universal requirement

A 20% down payment can reduce the amount borrowed and may avoid private mortgage insurance on many conventional loans. That does not make 20% the correct choice for every buyer. Waiting to reach 20% can delay a purchase, while using nearly all available savings can leave a new homeowner exposed to repairs or income changes. The decision should compare the monthly payment, mortgage-insurance cost, total cash required, remaining reserves, and personal timeline.

Perform a cash-to-close forensic review

Before selecting a percentage, assign every available dollar a job. This prevents the down payment from consuming money needed elsewhere in the transaction or during the first months of ownership.

Down payment

What amount is required for each realistic loan option, and how does a larger amount affect the payment and total cost?

Closing costs and prepaids

What lender charges, third-party services, taxes, insurance, escrow deposits, and prepaid interest may be due?

Transaction expenses

What may be needed for inspections, appraisal charges when applicable, deposits, moving, utility setup, or immediate work?

Emergency reserves

How much should remain accessible after closing for job, medical, vehicle, or home-repair surprises?

Life priorities

What savings must remain available for retirement, education, family goals, travel, or other obligations?

The CFPB suggests subtracting moving costs, renovations, other savings goals, and an emergency cushion—often three to six months of expenses—from available funds before determining the maximum cash available for closing.

How a larger down payment can change the loan

A larger down payment generally reduces the loan amount and may reduce the monthly principal-and-interest payment. Depending on the program and transaction, it may also change mortgage-insurance requirements, pricing, approval considerations, or the choices available. The benefit is not always linear. Ask for side-by-side scenarios at meaningful thresholds rather than assuming that every additional dollar produces the same benefit.

Where down-payment funds may come from

Depending on the loan program and documentation requirements, eligible funds may include personal checking or savings, documented investment assets, proceeds from the sale of an eligible asset, permitted gift funds, and approved grants or assistance. Funds generally must be documented and verified. Avoid moving large amounts between accounts, depositing unexplained cash, borrowing money, or liquidating investments without first discussing the documentation and qualification effects with your loan originator and appropriate tax or financial professional.

Down-payment assistance in Arizona and Nevada

Arizona and Nevada offer programs that may help eligible buyers with down payment or closing costs. Assistance is not automatically free money. Depending on the program, it may be structured as a grant, forgivable loan, deferred-payment second mortgage, or repayable second mortgage. Eligibility, funding, income limits, property rules, education requirements, approved lenders, interest rates, and repayment terms can change.

Arizona buyers can review current information from the Arizona Industrial Development Authority’s Home Plus and Arizona Is Home resources. Nevada buyers can review the Nevada Housing Division’s Home Is Possible programs. The correct comparison considers both the assistance and the terms of the associated first mortgage. A dedicated Arizona and Nevada down-payment-assistance guide will follow in this resource series.

A practical down-payment decision process

Define your available funds. Separate verified purchase funds from money reserved for other goals.
Estimate the complete transaction. Include the down payment, closing costs, prepaids, inspections, moving, and immediate projects.
Preserve a cushion. Decide how much must remain liquid after closing.
Compare eligible programs. Review conventional, FHA, VA, USDA, and assistance options only where eligibility is verified.
Model several percentages. Compare the payment, mortgage insurance, cash required, and remaining reserves at different down-payment levels.
Choose the sustainable structure. Select the option that supports both the purchase and your financial health afterward.

Frequently asked questions

Do I have to put 20% down to buy a home?

No. Some qualified borrowers may have conventional options with as little as 3% down, FHA financing with as little as 3.5% down, or eligible VA or USDA options with no down payment. Requirements and costs vary, and approval is not guaranteed.

Is a 3% down payment always better than waiting for 20%?

No single percentage is always better. A smaller down payment may allow an earlier purchase and preserve cash, but it can increase the loan balance, monthly payment, mortgage insurance, or other costs. A larger down payment may lower some costs but leave less money available for emergencies and other goals.

How much cash will I need in addition to the down payment?

You may need cash for closing costs, prepaid taxes and insurance, initial escrow deposits, inspections, moving, repairs, and reserves. The CFPB states that closing costs alone commonly range from about 2% to 5% of the purchase price, excluding the down payment, but your actual amount will be transaction-specific.

Can gift funds be used for a down payment?

Many mortgage programs permit eligible gift funds when the donor, transfer, documentation, and borrower contribution satisfy program and lender requirements. Do not transfer funds until you understand the documentation process.

Can down-payment assistance cover all of my upfront costs?

It depends on the program, assistance amount, loan structure, and transaction costs. Assistance may not cover every expense and may create a second lien or repayment obligation. Review the full first-mortgage and assistance terms together.

Should I use all of my savings for a larger down payment?

Usually, that deserves careful analysis. Homeownership can create immediate and unexpected expenses. Compare the benefit of a larger down payment with the value of keeping emergency reserves and funds for closing, moving, repairs, and other priorities.

Continue your affordability review

Down payment is only one part of a sustainable purchase plan. Read How Much House Can I Afford in Arizona or Nevada? to review income, monthly expenses, taxes, insurance, HOA dues, maintenance, and the financial margin you want to preserve.

Your next step

A useful consultation should show you more than the minimum down payment. You should see how different structures affect your cash to close, estimated payment, mortgage insurance, reserves, and longer-term priorities.

Schedule a consultation with Ben Sechena: Choose a consultation time

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About the author

Ben Sechena is a Mortgage Loan Originator with Edge Home Finance, LLC and is licensed in Arizona and Nevada. Before entering mortgage lending, Ben spent 15 years as a licensed pharmacist, where he developed an approach centered on accuracy, education, careful listening, and translating complex information into understandable decisions. He brings that same no-jargon approach to home financing. Ben Sechena NMLS 2825684. Edge Home Finance, LLC NMLS 891464.

Sources and further reading

Important information

This article is provided for general educational purposes only and is not financial, tax, legal, or accounting advice. It is not a Loan Estimate, prequalification, preapproval, offer, commitment to lend, or guarantee of approval, interest rate, payment, loan program, assistance, or terms. All loans are subject to credit approval, program guidelines, underwriting requirements, and property eligibility. Down-payment and assistance-program availability, funding, eligibility, interest rates, fees, and terms may change without notice. Additional restrictions may apply. Equal Housing Opportunity.