Do I need 20% down to buy a home?

No. Many programs allow down payments well below 20 percent, though mortgage insurance may apply depending on the loan and down payment amount.

Can I use gift money for my down payment?

Many loan programs allow gift funds, typically from family members, subject to documentation such as a signed gift letter and proof of the transfer.

What counts as a large deposit that needs explaining?

This varies by lender, but any deposit that stands out relative to your normal income pattern may need documentation showing its source.

How long should funds sit in my account before applying?

This depends on the lender's seasoning requirements, so it's best to ask your loan officer early so you can plan your savings timeline accordingly.

Are down payment assistance programs available in Ohio?

Availability and eligibility vary by program, location, and loan type. A loan officer can help identify what might apply to your situation.

First Time Homebuyers

How to Save for a Down Payment

Explore practical strategies for saving toward a down payment, how sourcing and seasoning of funds works, and how down payment assistance and gift funds fit in.

Updated 2026-08-17| Applies to: Buyers building savings toward a future home purchase.

The short answer

Saving for a down payment often involves a combination of dedicated saving, understanding how much is actually required for your loan program, and knowing that funds from savings, gifts, or assistance programs typically need to be documented and sometimes seasoned in your account before closing. Down payment requirements vary widely by program, so the amount you need to save depends heavily on which loan you use.

How much do you actually need to save?

Down payment requirements vary significantly depending on the loan program, so it helps to know your target before assuming you need a large lump sum. Some programs allow down payments well below 20 percent, and certain government-backed programs may allow very low or no down payment for eligible borrowers. Knowing your likely program early can make your savings goal far more realistic.

Program type	General down payment range
Conventional	Often as low as 3-5% for eligible borrowers, though it varies
FHA	Often around 3.5% for qualifying borrowers
VA	Often 0% down for eligible veterans and service members
USDA	Often 0% down in eligible rural areas

What are practical ways to save?

Set up a dedicated, separate savings account for your down payment so it's easier to track progress and avoid spending it accidentally.
Automate a fixed transfer from each paycheck into that account.
Reduce discretionary spending temporarily and redirect the difference toward savings.
Consider a side income stream if it fits your schedule and doesn't complicate your income documentation for underwriting.
Review recurring subscriptions or expenses that could be trimmed for a set period.

What does 'sourcing and seasoning' of funds mean?

Lenders generally need to verify where your down payment funds came from, which is called sourcing, and in many cases want to see that the funds have been in your account for a period of time, which is called seasoning. This is meant to confirm the funds are genuinely yours and not an undisclosed loan that could affect your ability to repay the mortgage. Large, unexplained deposits close to your application date are one of the most common reasons underwriters ask for additional documentation.

How can you make sourcing easier?

Keep down payment savings in one account rather than moving money between several accounts.
Avoid large cash deposits that don't have a clear paper trail.
Keep records of any large deposits, such as a bonus, tax refund, or sale of an asset.
Ask your loan officer how far in advance to have funds seasoned before applying.

How do gift funds and assistance programs fit in?

Many loan programs allow all or part of a down payment to come from a gift, typically from a family member, subject to specific documentation requirements such as a signed gift letter and proof the funds were transferred. Down payment assistance programs may also be available in some areas and through some loan programs, offering grants or second loans to help cover down payment or closing costs, depending on eligibility.

Down payment requirements, gift fund rules, and assistance program availability vary by loan program and lender. Confirm current requirements directly with your loan officer.