Down payment requirements in Washington vary by loan type, not by state law

Washington has no state-specific down payment requirement for first-time buyers. What matters is the loan program you use: conventional loans typically require 3 to 20 percent down, FHA loans require 3.5 percent, VA loans require zero percent if you may have access to, and USDA loans require zero percent in may be able to access rural areas. The lender and the loan type set the floor, not Washington state.

Most first-time buyers in Washington put down between 3 and 10 percent. A smaller down payment means a larger loan, which means higher monthly payments and mortgage insurance costs. A larger down payment reduces what you borrow and can lower your interest rate, but it also means more cash sitting in escrow instead of in your savings account.

The down payment is separate from closing costs, which typically run 2 to 5 percent of the purchase price. You need both amounts ready before closing day.

Key Takeaways

  • Washington state does not set a minimum down payment; your lender and loan type do, and they typically range from zero to 20 percent.
  • FHA loans allow 3.5 percent down and are common for first-time buyers with lower credit scores or smaller savings.
  • VA and USDA loans require zero percent down if you meet the service or income requirements, but USDA loans only work in designated rural areas.
  • Closing costs are separate from your down payment and usually cost 2 to 5 percent of the home price on top of what you put down.
  • Putting down less than 20 percent triggers private mortgage insurance, which adds to your monthly payment until you reach 20 percent equity.

Conventional loans: 3 to 20 percent down

A conventional loan is a mortgage that is not backed by a federal agency. Lenders set their own rules within broad industry standards. Most conventional loans in Washington require a minimum of 3 percent down, though some lenders require 5 or 10 percent depending on your credit score and debt-to-income ratio.

If you put down less than 20 percent on a conventional loan, you pay private mortgage insurance (PMI). This is an insurance policy that protects the lender if you stop paying. PMI typically costs 0.5 to 1.5 percent of your loan amount per year, added to your monthly payment. You can remove PMI once you reach 20 percent equity in the home, either through payments or home appreciation.

Conventional loans usually have stricter credit and income requirements than FHA loans. Most lenders want a credit score of 620 or higher, though 640 to 660 is more common for the best rates. Your debt-to-income ratio (total monthly debt divided by gross monthly income) usually cannot exceed 43 percent.

FHA loans: 3.5 percent down with more flexibility

An FHA loan is backed by the Federal Housing Administration and is designed for buyers with lower down payments or credit scores. The minimum down payment is 3.5 percent, and FHA allows credit scores as low as 580. Many first-time buyers in Washington use FHA loans because the down payment requirement is lower and the credit standards are more forgiving than conventional loans.

FHA loans require mortgage insurance, but it works differently than PMI on conventional loans. You pay an upfront mortgage insurance premium (UFMIP) of 1.75 percent of the loan amount at closing, and then an annual mortgage insurance premium (MIP) added to your monthly payment. The annual MIP typically ranges from 0.55 to 0.8 percent of the loan amount per year, depending on your down payment and loan term. Unlike PMI, FHA mortgage insurance does not go away automatically; you pay it for the life of the loan if you put down less than 10 percent.

FHA loans have a maximum loan limit that varies by county in Washington. In 2024, the limit ranges from around $472,000 in rural counties to $766,550 in high-cost areas like King County (Seattle). Check with your lender for the current limit in your county.

VA loans: Zero down if you served

If you are a veteran, active-duty service member, or surviving spouse, you may be able to get a VA loan with zero percent down. VA loans are may provide by the Department of Veterans Affairs and do not require a down payment, PMI, or mortgage insurance of any kind. You do pay a one-time VA funding fee (typically 1.4 to 3.6 percent of the loan amount), which can be rolled into the loan itself.

VA loans have no maximum loan amount in Washington, though lenders set their own limits. You must have a Certificate of may be able to access from the VA, which you can request through the VA website or through your lender. VA loans typically have lower interest rates than conventional or FHA loans because the government may provide reduces the lender's risk.

You do not have to be a first-time buyer to use a VA loan, and you can use your benefit more than once. If you have used your VA benefit before and want to use it again, you may need to have paid off the previous VA loan or have sufficient remaining entitlement.

USDA loans: Zero down in rural areas

USDA loans are backed by the U.S. Department of Agriculture and require zero percent down in designated rural areas. To use a USDA loan in Washington, the property must be in an may be able to access area, which includes many parts of rural Washington but excludes Seattle, Tacoma, Spokane, and their when ready suburbs. You can check whether a specific address is may be able to access on the USDA website.

USDA loans have income limits that vary by county and family size. In general, your household income cannot exceed 115 percent of the area median income for your county. USDA loans also require a may provide fee (typically 2 percent of the loan amount) and an annual fee (0.35 percent of the loan amount), both of which can be rolled into the loan.

USDA loans do not require PMI, but they do require the may provide fee and annual fee. Credit score requirements are typically 640 or higher, though some lenders go lower. Like VA loans, USDA loans often have competitive interest rates because the government may provide reduces lender risk.

Down payment information programs in Washington

Washington state and some local governments offer down payment information to first-time buyers. The Washington State Housing Finance Commission runs the Community Home Trust program, which provides down payment and closing cost information to low- and moderate-income buyers. may be able to access depends on your income, credit score, and the purchase price of the home.

Some counties and cities in Washington also run their own programs. King County (Seattle area) has the Homebuyer information Program, and Pierce County (Tacoma area) has similar offerings. These programs often require you to complete a homebuyer education course before you can use them. The information is usually a grant or a second mortgage with favorable terms, not a loan you have to repay in full.

Down payment information does not change your main loan requirements—you still need to meet the lender's credit and income standards for your primary mortgage. The information straightforward reduces the amount of cash you have to bring to closing.

What happens if you cannot save a full down payment

If you have saved less than 3 percent, you have limited options. Some lenders offer loans with 1 or 2 percent down, but they are rare and usually come with higher interest rates and stricter credit requirements. A more realistic path is to use an FHA loan with 3.5 percent down, or to explore down payment information programs in your area.

Another option is to delay your purchase and save more. Putting down 5 or 10 percent instead of 3.5 percent reduces your monthly PMI or MIP costs significantly. For a $400,000 home, the difference between 3.5 and 10 percent down is roughly $26,000 in cash upfront, but it can save you $100 to $200 per month in insurance costs.

Borrowing the down payment from family is legal if the lender allows it, but most lenders require a gift letter stating that the money does not have to be repaid. Some lenders will not allow borrowed down payments at all, so ask before you accept a loan from a relative.

Frequently Asked Questions

Can I use a gift from family for my down payment?

Yes, most lenders allow down payment gifts from family members. You will need a gift letter from the person giving you the money, stating the amount and that it does not have to be repaid. The lender will verify the gift came from a real person and was not borrowed. Some lenders require the gift to come from a close relative, so ask your lender about their specific rules.

What is the difference between PMI and mortgage insurance?

PMI (private mortgage insurance) is used on conventional loans and protects the lender if you default. It goes away once you reach 20 percent equity. Mortgage insurance on FHA loans (called MIP) serves the same purpose but is required for the life of the loan if you put down less than 10 percent. Both are added to your monthly payment, but FHA mortgage insurance is typically cheaper upfront and more expensive over time.

Do I have to put down 20 percent to avoid insurance?

On a conventional loan, yes—20 percent down eliminates PMI. On an FHA loan, putting down 10 percent or more still requires mortgage insurance for the life of the loan. VA and USDA loans do not require PMI or mortgage insurance at any down payment level. If you cannot save 20 percent, an FHA, VA, or USDA loan may be cheaper than a conventional loan with PMI.

What if my credit score is below 620?

Most lenders will not approve a conventional loan with a credit score below 620. FHA loans allow scores as low as 580, and some lenders go lower. If your score is very low, you may need to wait and build credit before you can borrow, or work with a credit counselor to improve your score. Some non-profit organizations in Washington offer free credit counseling.

Can I put down more than 20 percent to get a better rate?

Yes, putting down more than 20 percent can lower your interest rate slightly because you are borrowing less and the lender's risk is lower. However, the rate reduction is usually small—often 0.1 to 0.25 percent. Whether it is worth tying up extra cash depends on your other financial goals and whether you could earn more by investing that money elsewhere.