Short answer: as little as 0% with a VA loan, 3% with a conventional first-time buyer loan, or 3.5% with FHA. Twenty percent is not required. It is also not always the right move.
Most Richmond, Henrico, and Chesterfield buyers in 2026 put between 3% and 10% down. The exact right number depends on price band, credit profile, monthly budget, and how long the buyer plans to stay.
This guide walks through the real options, the trade-offs, and the math at each level on a $400,000 Richmond-region home.
The five common down-payment paths
0% down: VA loan
For active-duty service members, veterans, and certain surviving spouses, the VA loan allows 0% down with no private mortgage insurance and competitive rates. There is a one-time funding fee, typically 1.25 to 3.3% of the loan, that can be financed.
On a $400,000 home with 0% down at 6.3%, the principal-and-interest payment is roughly $2,477. Plus taxes, insurance, and HOA, total monthly housing cost in Henrico runs about $3,200 to $3,500.
3% down: conventional 97 (first-time buyer)
Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs allow 3% down for qualifying first-time buyers. Income limits apply (80% of area median income in most cases [verify]). Private mortgage insurance applies until the loan reaches 80% of original value.
On a $400,000 home with 3% down ($12,000), the monthly principal-and-interest is roughly $2,403, plus PMI of about $130 to $200 a month at this loan-to-value.
3.5% down: FHA
FHA loans allow 3.5% down with credit scores as low as 580. The mortgage insurance is more expensive than conventional (1.75% upfront, 0.55% annual on most thirty-year loans), and it does not drop off automatically the way conventional PMI does.
FHA still makes sense for buyers with thinner credit or higher debt-to-income, especially when stacked with Virginia Housing’s first-time buyer programs.
5 to 10% down: conventional
Buyers with stronger credit and income often land here. PMI is lower than FHA and falls off when the loan reaches 80% of original value. Five percent on $400,000 is $20,000. Ten percent is $40,000.
This is the most common down payment in the Richmond region for non-first-time buyers, and a frequent landing spot for move-up buyers using equity from a prior sale.
20% down: conventional, no PMI
Twenty percent on a $400,000 home is $80,000. No PMI. Lower payment. Stronger offer in a competitive market.
It is a luxury, not a requirement. A buyer who can put 20% down but only has $90,000 in savings should think hard about the difference between $80,000 down with $10,000 left over, and $40,000 down with $50,000 in reserves. Reserves matter when the HVAC fails in July.
What buyers actually pay
Here is the same $400,000 Richmond-region home at four down-payment levels, at a 6.3% rate:
| Down payment | Cash at down | Monthly P&I | PMI | Total monthly* |
|---|---|---|---|---|
| 3% ($12,000) | $12,000 | $2,403 | ~$160 | ~$3,200 |
| 5% ($20,000) | $20,000 | $2,353 | ~$140 | ~$3,150 |
| 10% ($40,000) | $40,000 | $2,229 | ~$80 | ~$2,985 |
| 20% ($80,000) | $80,000 | $1,981 | $0 | ~$2,650 |
*Total includes estimated taxes, insurance, and modest HOA. Actual numbers depend on locality. See our property tax guide for how Richmond city, Henrico, and Chesterfield bills compare.
These numbers exclude closing costs, which run roughly $11,000 to $14,000 on a $400,000 conventional loan. See our Virginia closing costs breakdown for the full stack.
When 20% down makes sense
- The buyer has strong reserves and the 20% does not strip them
- The market is competitive and a stronger offer matters
- The buyer hates the idea of mortgage insurance enough to pay for the privilege
- The plan is long-term ownership, where the lower payment compounds
When less than 20% makes sense
- First-time buyer with grant stacking available. Programs like Virginia Housing’s 2.5% grant only apply when the buyer is in the right product.
- Reserves matter more than rate. A buyer who lands with $5,000 in the bank after closing is one bad month away from a problem.
- The plan is to refinance soon. Putting less down preserves cash for the next move.
- New construction with builder rate buy-downs. Builders in Richmond’s larger communities (Stanley Martin, Ryan, HHHunt, Eagle) often offer rate buy-downs that work better with smaller down payments. See our builder comparison for current incentives.
The reserve rule of thumb
After closing, most lenders want to see two months of housing payments in reserves. Practically, three to six months is what keeps buyers out of trouble. That means:
- $400,000 home with $3,200 monthly cost
- Reserves target: $9,600 to $19,200 after closing
A buyer with $40,000 saved should not put $35,000 down. Twenty thousand down with $20,000 in reserves is a sturdier position.
Gift funds, retirement accounts, and other sources
Most Virginia conventional and FHA loans allow gift funds from family for the entire down payment, with a signed gift letter. Retirement-account loans (typically up to $50,000 or 50% of vested balance) are allowed for first-time buyers and can be repaid over time. Selling investments works but creates a tax event. The lender will document the source of funds; buyers should not move large amounts between accounts in the sixty days before applying.
Frequently asked questions
Can I really buy a house in Richmond with no money down? Yes, with a VA loan if eligible, or a USDA loan in qualifying rural areas of Goochland, Powhatan, or New Kent. Outside those, the practical floor is about 3 to 3.5% down with grants stacked.
Is it better to put 20% down or invest the difference? Long-term, broad-market equity returns have averaged higher than mortgage rates, so investing the difference often wins on paper. In practice, most buyers benefit more from the security of the lower payment and the discipline of forced savings via principal pay-down.
Do I need 20% to avoid PMI? On conventional loans, yes. On VA loans, there is no PMI at any level. On FHA loans, mortgage insurance applies regardless of down payment.
Can my parents gift me the down payment? Yes, with a gift letter and proof of source for conventional and FHA loans. Most Richmond lenders process gift funds routinely.
What if I haven’t saved enough yet? A real conversation with a Virginia Housing-approved lender, plus credit work, is usually six to twelve months of focused effort. Our first-time buyer programs guide covers what is available right now.
Want a real number for your situation?
We pair buyers with two or three Richmond-area lenders to get true side-by-side quotes, then walk through which down-payment level fits the goal. Reach out to Daniel for a free first conversation, no commitment.
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