Many first-time home buyers in Florida believe they have to put 20% down when buying a house. But that’s rarely necessary.
In reality, some mortgage programs allow for a down payment as low as 3% of the purchase price—if the borrower pays for mortgage insurance.
⚠️ Here are seven things you should know right up front:
- Mortgage lenders only require 20% down in certain rare cases.
- Some home loan programs allow for a down payment below 5%.
- FHA loans require a minimum investment of 3.5% of the home value.
- Some conventional (non-government) loans offer a 3% option.
- VA loans for military members allow buyers to finance the entire purchase.
- Borrowers can often use gift money from a third party, like a family member.
- Down payments below 20% typically require mortgage insurance.
Related article: How to buy a home in Florida in 2025
How Much Down Payment Is Needed in Florida?
So, what do the above percentages look like in actual dollar amounts?
The median home price in Florida is currently around $378,031 (fall 2025). At that price point, here’s what the average down payment would be for different mortgage options:
- 3.5% (minimum investment for FHA loans): $13,231
- 3% (minimum for conventional loans with PMI): $11,341
- 7% (average down payment among first-time buyers): $34,022
- 20% (investment needed to avoid PMI): $75,606*
* Private mortgage insurance (PMI) is typically required when a borrower has a loan-to-value ratio above 80%, which occurs when the down payment amount is below 20%.
Down Payment Myths and Misconceptions
For a typical Florida home buyer, the down payment represents the single greatest obstacle to homeownership. But misinformation and misconceptions can create even bigger obstacles.
According to a nationwide consumer survey conducted by Realtor.com:
“When surveyed, 35% of consumers think they need 16% to 20% for a down payment and 10% of consumers think they need more than 20% for a down payment.”
The authors continued: “However, in actuality the typical down payment for first-time buyers has ranged between six to seven percent since 2018.”
In fall 2025, the median home value in Florida was $378,031. If a home buyer thinks they have to put 20% down on a median-priced home, they might expect a down payment of $75,606.
But the Realtor.com survey mentioned above found that the typical down payment among first-time buyers was actually closer to 6%.
The minimum down payment for an FHA loan is 3.5%. And the minimum for some conventional loans can be as low as 3%, if the borrower takes a home-buying education course.
With these loan options, the down payment for that $378,031 median-priced home would drop to a range of $11,341 to $13,231.
The takeaway: Buyers who don’t understand their mortgage options might think they’re not qualified to purchase a home—even when they are!
Using Gift Money From a Third Party
When buying a home in Florida, you don’t necessarily have to come up with the full down payment amount from your own wallet. You could use a financial gift from a family member or other approved donor, to reduce your out-of-pocket expense.
Definition: A “down payment gift” is money gifted from a third party that can be applied to the borrower’s upfront investment and closing costs.
The problem is that a lot of Florida home buyers don’t even know about down payment gifts. As a result, they often think that buying a home is beyond their financial reach.
“I can afford the monthly costs … I just can’t cover the down payment.”
In this kind of scenario, gift money can make all the difference, helping buyers overcome the initial hurdle along the path to homeownership.
Most mortgage products and programs allow for down payment gifts. But the rules can vary.
For example, FHA loans allow gift money from a broad range of third-party donors, while conventional loans usually limit it to family members or significant others.
Regardless of the program, the lender will need to ensure that the money is truly a gift, and not a loan that you’ll have to repay. So they’ll require a gift letter from the donor stating this.
The Mortgage Insurance Factor
Some home buyers in Florida have to pay for private mortgage insurance (PMI) when making a low down payment. This can add another $100 to $250 onto the monthly payments.
Mortgage insurance protects the lender in case the borrower defaults on (fails to repay) their mortgage payments. It provides a safety net in low-down-payment situations.
Lenders view borrowers with lower down payments as riskier because they have less equity in the property. By requiring mortgage insurance, lenders mitigate some of this risk.
Here’s an overview of mortgage insurance requirements by loan type:
- FHA loans: Mortgage insurance is required for all home buyers.
- Conventional: It’s required when the loan-to-value ratio exceeds 80%.
- VA loans: Mortgage insurance is not required, a major benefit.
While it costs extra, mortgage insurance also provides benefits for home buyers. It allows you to buy a home sooner rather than later, by reducing the down payment requirement.
Part 2: Down Payment Assistance Programs
Some Florida home buyers struggle to come up with the funds for a down payment.
This applies to first-time buyers, in particular, since they don’t have profits from a previous home sale to put toward their next purchase.
In these situations, a down payment assistance program might be able to help.
Down payment assistance (DPA) programs are typically offered by state and local housing agencies, in partnership with non-profit organizations.
The actual assistance can come in several forms, including grants, forgivable loans, or low-interest second mortgages that cover some of the down payment.
Some of these programs operate statewide, while others are offered at the city or county level. So you’ll want to do some local research to see what’s available.
Types of Assistance Available
Down payment assistance can come in many forms, so the specific requirements can vary quite a bit from one program to the next. Here are the most common types:
1. Grants: These are funds provided by governmental agencies, non-profit organizations, or sometimes employers to help cover a portion or all of the down payment. Grants typically do not require repayment, making them an attractive option for many buyers.
2. Specialty Loans: Some down payment assistance programs offer loans with favorable terms, such as low-interest rates or deferred payments. These loans can help buyers bridge the gap between their available funds and the required down payment amount. They may be forgivable over time or require repayment after a certain period.
3. Forgivable Loans: These are loans that are forgiven over time, often as the homeowner continues to live in the property for a specified period, typically several years. If the homeowner meets the program’s requirements, such as remaining in the home as their primary residence, the loan is gradually forgiven, effectively turning into a grant.
Example: Florida Housing Finance Corporation
The Florida Housing Finance Corporation offers several forms of down payment assistance, including non-repayable grants that provide 3% to 5% of the total first mortgage loan amount.
They also offer deferred, zero-interest second mortgages, such as the Florida Assist (FL Assist) program, which provides up to $10,000.
For eligible frontline community workers, the Hometown Heroes program offers up to $35,000 in assistance, also as a deferred second mortgage.
These options must be paired with one of the corporation’s 30-year, fixed-rate first mortgage loans to create an affordable and accessible path to homeownership.