How much is the FHA down payment?
3.5% of the price with a 580+ score, per HUD Handbook 4000.1: $10,500 on a $300,000 home, $15,750 on a $450,000 home. With a 500-579 score the tier is 10%, or $30,000 on that same $300,000 home.
Those computed figures are estimates for illustration, not quotes, and they're the number that kills the biggest myth in home buying: the 20%-down rule that stops renters from ever asking. Nobody needs 20% for an FHA loan; most of my FHA buyers close with the 3.5% tier plus closing costs. And to flag the opposite myth with equal force: there is no zero-down FHA loan. Ads promising one are describing VA, USDA, or a DPA program wearing an FHA costume.
Can the FHA down payment be a gift?
Yes, all of it. HUD allows the entire down payment to come from gift funds from approved sources: family, your employer or union, a close friend with a documented interest, or qualifying agencies, per Handbook 4000.1.
The documentation is the part to take seriously: a signed gift letter stating the money is a true gift with no repayment expected, plus a clean paper trail of the transfer from the giver's account to yours or to escrow. Underwriters verify both, and a sloppy trail delays closings that a tidy one sails through. Allowed for the down payment from approved sources (family, employer, close friend with documented interest, qualifying agencies); documented per 4000.1 (gift letter, no repayment). If your parents are helping, loop me in early and I'll hand everyone the exact checklist; the gift that closes smoothly is the one documented before it moves.
Can you use down payment assistance with FHA?
Often, yes. FHA pairs with many state and local DPA programs, which provide grants, forgivable seconds, or low-interest second loans toward the 3.5%, per HUD's approved-source rules.
Every program has its own eligibility: income limits, price caps, sometimes first-time-buyer rules (a DPA restriction, not an FHA one), and homebuyer education classes. The landscape is state-by-state, and I work with programs across the twelve states I'm licensed in. Start with my down payment assistance guide and the first-time buyer page, then bring me your state and income and I'll tell you which programs are real options versus brochure decorations.
Is the down payment the same as cash to close?
No, and the difference surprises buyers: cash to close is the down payment plus closing costs, prepaid taxes and insurance, less any credits. The upfront mortgage insurance premium is usually financed rather than paid in cash, per HUD.
Two levers can shrink the closing-cost side. Seller contributions can cover closing costs up to HUD's 6% cap (they can never fund the down payment itself), and lender credits can trade a slightly different rate structure for cash at the table. When I quote an FHA purchase, you get the full cash-to-close picture with the MIP shown honestly, because a down payment number alone is half a truth.
What changes if you put 10% down?
One big thing, per HUD Handbook 4000.1: at 10% or more down, the monthly MIP runs 11 years instead of the life of the loan. It's also the required tier for 500-579 credit scores.
Whether volunteering 10% is smart when only 3.5% is required depends on your alternatives: reserves after closing have real underwriting and real-life value, and for many buyers the stronger play is the minimum down payment, intact savings, and a planned refinance to conventional as the MIP exit instead. That's a math conversation, not a slogan, and I'll run your version both ways before you commit a dollar.