Fast Facts About Low Down Payment Options
Home Loan Options With Low Down Payment Requirements
While many believe that putting 20% down when buying a home is still necessary, that's not always the case. Lower down payment programs are available and are helping make homeownership more attainable.
How much down payment is required depends on the loan you get, but know that options are available. Here are a few of the most popular low-down-payment home loans.
FHA Loans
FHA loans are an excellent option for many first-time homebuyers as they require just a 3.5% down payment. FHA loans offer competitive terms like low-interest rates and lower closing costs and fees than many conventional mortgage loans.
VA Loans
VA loans, which are available to active-duty service members, veterans, or the spouse of a veteran (and some other individuals affiliated with our armed services), are one of the rare mortgage loan programs available that can require zero down!
USDA Loans
A down payment is not required with a USDA loan, and the mortgage insurance is cheaper than most other low–down–payment loan programs.
Conventional Loan
Although 20% down payment is traditional, most lenders ask for just 3-5% down on 30-year fixed-rate loans.
✅ Benefits of Contract Loan Processing for VA Loans
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Specialized VA Knowledge
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VA loans have unique requirements (COE, residual income, funding fee calculations, appraisal requirements).
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A contract processor experienced in VA loans can spot potential issues early and streamline the process.
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Cost Savings for Lenders
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No need to hire full-time staff; processors are paid per file.
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Helps smaller brokerages or lenders manage fluctuating loan volumes without carrying extra payroll.
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Faster Turn Times
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Contract processors often work remotely and are paid per closed file, so they’re incentivized to move loans quickly.
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They can push COE requests, follow up on VA appraisals, and ensure VA-specific forms (26-1880, 26-8923) are completed on time.
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Compliance & Accuracy
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VA has strict guidelines (e.g., allowable fees, seller concessions, and veteran protections).
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A skilled processor reduces risk of compliance errors that could lead to loan buybacks or funding delays.
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Scalability
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During high volume seasons (e.g., rate drops, PCS military moves), lenders can bring on extra processors quickly without long-term HR commitments.
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Reduced Loan Officer Burden
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Lets LOs focus on originating, networking, and serving clients while the processor handles gathering DD-214s, income docs, pest inspection reports (if required), and underwriting conditions.
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Improved Borrower Experience
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Veterans and active-duty borrowers often value clear communication and speed.
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A processor who knows the VA process can anticipate documentation needs and prevent last-minute surprises.
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👉 In short: Contract processors help lenders stay lean, compliant, and efficient, while ensuring veterans have a smoother experience.
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