Understanding Real Down Payment Requirements, State-by-State Differences, and What Today’s Market Means for Buyers
How Much Down Payment You Really Need in Every State (2025 Full Guide)
Discover how much down payment you truly need across different states. Learn state-by-state median down payments, metro-area affordability, loan requirements, and down payment assistance options. Based on 2024–2025 market data.
Why Down Payments Vary So Much by State
Rising housing costs across the U.S. have made down payments one of the biggest obstacles for homebuyers. After a dramatic 14.63% surge in home prices from 2020–2021 and another 3.81% growth in 2023, affordability has taken center stage for both first-time and repeat homebuyers.
And while many believe down payment requirements change depending on where you live, that’s not technically true.
Loan types not states determine your minimum down payment percentage.
However, median down payments do vary by state because home prices differ dramatically nationwide. For example:
- A 15% down payment in Hawaii (median home price: $899,000) = $134,850
- A 15% down payment in Iowa (median home price: $221,000) = $33,150
The percentage is the same, the cash required is not. Below, you’ll find a full breakdown of down payment requirements, median down payments by state, metro-area variations, and strategies to save effectively.
Median Down Payment by State (2024–2025 Data)
Using Redfin’s median single-family home sale prices from November 2023, along with the National Association of Realtors’ average 15% down payment, researchers analyzed the cost of down payments in all 50 states.
Key Findings
- Hawaii has the highest median down payment: $134,850
- Iowa has the lowest: $33,150
- 19 states + Washington DC have median down payments higher than the national median of $63,900
- Western and Northeastern states dominate the highest-cost rankings
- Midwestern and Southern states make up most of the lowest-cost list
Top 15 States With the Highest Median Down Payments
| State | Median Home Price | 15% Down Payment |
| Hawaii | $899,000 | $134,850 |
| California | $816,000 | $122,400 |
| Delaware | $800,000 | $120,000 |
| Colorado | $629,000 | $94,350 |
| Utah | $622,000 | $93,300 |
| Washington | $621,000 | $93,150 |
| Massachusetts | $607,000 | $91,050 |
| Oregon | $502,000 | $75,300 |
| New Jersey | $492,000 | $73,800 |
| Maryland | $488,000 | $73,200 |
| Montana | $486,000 | $72,900 |
| Idaho | $480,000 | $72,000 |
| Nevada | $469,000 | $70,350 |
| New York | $459,000 | $68,850 |
| Rhode Island | $458,000 | $68,700 |
Lowest-Cost States (Bottom 15)
| State | Median Home Price | 15% Down Payment |
| Iowa | $221,000 | $33,150 |
| Mississippi | $227,000 | $34,050 |
| Ohio | $235,000 | $35,250 |
| Oklahoma | $237,000 | $35,550 |
| Michigan | $240,000 | $36,000 |
| Louisiana | $244,000 | $36,600 |
| Indiana | $245,000 | $36,750 |
| Arkansas | $246,000 | $36,900 |
| Missouri | $247,000 | $37,050 |
| Kentucky | $249,000 | $37,350 |
| Illinois | $266,000 | $39,900 |
| Alabama | $267,000 | $40,050 |
| North Dakota | $269,000 | $40,350 |
| Nebraska | $280,000 | $42,000 |
| Pennsylvania | $289,000 | $43,350 |
Median Down Payments by Metro Area: Why Cities Cost Even More
Interestingly, metro-area down payments often exceed statewide medians, especially in California.
Key Metro Area Insights
- The top four metro areas with the highest down payments are all in California
- The median down payment in the top 10 metros is $138,345
- The top 50 metros have a median of $71,889
- Only five metro areas have lower down payments than their state averages
- Buffalo, Pittsburgh, Cleveland, Detroit, St. Louis
Urban homebuyers often face:
- Higher demand
- Lower inventory
- Higher-priced homes
- Increased competition
This pushes down payments well above the state norm.
What Percent Down Payment Do You Really Need?
Although median down payments hover around 15%, the actual requirement varies by loan program. Here’s how much you actually need, not how much buyers typically put down.
FHA Loans Minimum 3.5% Down
- Backed by the Federal Housing Administration
- Designed for buyers with lower credit scores
- Down payments:
- 3.5% with credit score ≥ 580
- 10% with credit score 500–579
- Includes mortgage insurance (MIP)
FHA loans are ideal for first-time buyers with limited savings.
Conventional Loans: Minimum 3%–5% Down
- Not government-backed
- Stricter credit standards
- Down payments:
- 3% for first-time buyers
- 5% for most borrowers
- Private Mortgage Insurance (PMI) required for under 20% down
Conventional loans are flexible but reward strong credit and income.
VA Loans 0% Down
- Available to:
- Veterans
- Active-duty service members
- Eligible surviving spouses
- Benefits:
- No down payment
- No PMI
- Low interest rates
- Limited closing costs
A VA loan is the best mortgage product in the U.S. for eligible buyers.
USDA Loans 0% Down
- For rural and some suburban areas
- Income limits apply
- Designed to help low- and moderate-income buyers
- No down payment required
An excellent option for buyers outside major cities.
How to Save for Your Down Payment (Expert Tips)
Saving for a home can feel overwhelming, but structured planning makes it achievable. According to the American Bankers Association, here’s the most effective approach:
1. Create a Down Payment Budget
- Identify your target home price
- Determine the percentage you need (3.5%–20%)
- Calculate how much to save monthly
- Cut unnecessary costs
- Track your progress
Budgeting helps you forecast how long saving will realistically take.
2. Use a Separate, Dedicated Savings Account
This reduces temptation and psychologically reinforces your financial goal.
Recommended accounts:
- High-yield savings
- Money market accounts
- Certificates of deposit
3. Research State and Local Assistance Programs
Many states offer:
- Grants
- Forgivable loans
- 0% second mortgages
- Closing cost assistance
These programs can dramatically reduce your upfront costs.
Helpful Backlinks:
HUD’s State-by-State Assistance: https://www.hud.gov/topics/buying_a_home/local_assistance
Top Down Payment Assistance Programs to Consider
Here are some well-known programs helping thousands of homebuyers each year:
The Home Ownership Council (HSA) Programs
- BIPOC Donor Restricted Fund: For first-time buyers identifying as Black, Indigenous, or people of color
- LMI Donor Restricted Fund: For low-to-moderate-income first-time buyers
The Chenoa Fund
- No income limits
- Down payment assistance in the form of a second mortgage or grant
Bank of America Down Payment Grant
- Up to 3%, capped at $10,000
- Available in select markets
Final Thoughts: What You Actually Need to Know About Down Payments
The biggest myth in real estate is that you need 20% down to buy a home. In reality:
- Many buyers purchase with 3%–5% down
- FHA buyers can qualify with 3.5%
- VA and USDA offer 0% down
- Assistance programs can significantly reduce upfront costs
What does vary by state is the cash amount needed because home prices differ, not because lenders require more.
Whether you’re buying in Hawaii or Iowa, urban California or rural Oklahoma, understanding your loan options and your state’s home price landscape is the key to planning your down payment strategically.
At First Nation Financial, we don’t just push paperwork—we partner with you, guide you step by step, and help you understand exactly what you need to do to qualify.
We believe in second chances, creative solutions, and turning “not yet” into “let’s do this.”So if you’ve been waiting until everything’s “perfect,” here’s your sign: it doesn’t have to be. What you need is someone who understands where you’re coming from—and knows how to get you where you want to go.
