If you’re shopping in Short Pump, Glen Allen, or the Richmond West End, the conventional loan down payment question usually shows up fast. Not because conventional financing is complicated, but because bad information is everywhere. I still hear buyers say they need 20% down to buy a home with a conventional loan. That is flat-out wrong.
The short answer is this: many conventional buyers can put down as little as 3%. Some will need 5%. Others choose 10%, 15%, or 20% because it improves payment, pricing, or both. The right number is not the biggest number you can scrape together. It’s the number that puts you in the strongest overall position.
How much is the conventional loan down payment?
For many primary residence purchases, the minimum conventional loan down payment is 3% for a qualified first-time buyer program and 5% for many other conventional options. If you’re buying a second home or investment property, the required down payment is usually higher.
That means a buyer looking at a $525,000 home near Short Pump Town Center is not automatically staring at a $105,000 hurdle. At 3% down, that’s $15,750. At 5% down, it’s $26,250. Big difference.
This is where buyers get tripped up. They focus only on the down payment and forget the rest of the cash needed. You also need to account for closing costs, prepaids, and reserves in some cases. That’s why the real conversation is never just, “What’s the minimum down payment?” It’s, “What’s the smartest total cash-to-close strategy?”
Why 20% down still matters – and why it isn’t required
Twenty percent down still has one major advantage. It eliminates private mortgage insurance, also called PMI, on a conventional loan. PMI is the extra monthly cost attached when you put down less than 20%.
That doesn’t mean 20% is the best move for everyone. Plenty of buyers in Henrico County have the assets to put 20% down but choose not to. They may prefer to keep liquidity for renovations, emergency reserves, furniture, or simply a stronger post-closing cash position. If you’ve ever bought a house in West Broad Village or Wyndham, you already know move-in costs don’t stop at the closing table.
I usually tell buyers to stop treating 20% like a moral victory. It’s just one option. Sometimes it’s the best option. Sometimes it isn’t.
What 3%, 5%, 10%, and 20% actually look like
Let’s use a $520,000 purchase price, which is right in the range many move-up and first-time buyers around Short Pump are seeing.
At 3% down, the down payment is $15,600.
At 5% down, it’s $26,000.
At 10% down, it’s $52,000.
At 20% down, it’s $104,000.
Those numbers matter, but the monthly payment matters more. A bigger down payment lowers the loan amount, may improve your interest rate, and can reduce or remove PMI. But draining an extra $26,000 to $78,000 from savings just to hit a round number can be a bad trade if it leaves you house-rich and cash-poor.
This is where broker access changes the conversation. A retail lender or single-shelf bank can only quote from its own menu. I shop 500+ wholesale lenders, so I can compare how different conventional options price out with 3%, 5%, 10%, or 20% down and show you the actual monthly impact.
Conventional loan down payment and PMI
PMI is the main reason buyers aim for a bigger conventional loan down payment. But PMI is not one-size-fits-all. It varies based on credit score, down payment, loan amount, occupancy, and other risk factors.
A buyer with strong credit putting 5% down may get much more reasonable PMI than they expected. A buyer with weaker credit may find that conventional financing becomes less attractive than FHA, even with a lower conventional down payment option on paper.
That’s why I don’t force conventional into every scenario. If FHA gives you a stronger total payment or a better approval path, that’s the smarter move. FHA is still my number one loan type for a reason, especially for buyers who want a low down payment and solid pricing. But for many Richmond-area borrowers with good credit, conventional is a strong fit.
The decision should be based on math, not marketing.
Credit score changes the answer
The conventional loan down payment is only part of the equation. Credit score has a major impact on whether conventional is your best lane at all.
If your score is strong, conventional can be excellent with as little as 3% or 5% down. If your score is more borderline, the payment may not be as attractive once PMI and pricing are layered in. In that case, FHA may outperform conventional even if the down payment difference is small.
This is exactly why I start with a NoTouch Credit Pull. It gives buyers a soft credit pull, soft pull pre-approval, no hard inquiry, no credit hit, and a no hard pull mortgage pre-approval path before they’re ready to make the full move. That matters if you’re still comparing neighborhoods, builders, or payment targets and you don’t want your credit dinged just to get answers.
First-time buyers often put too much pressure on down payment
First-time buyers in Richmond’s West End often think the whole deal rises or falls on one number. Usually it doesn’t.
A buyer near Deep Run High School shopping around $500,000 to $527,000 may be much better off putting 3% to 5% down and preserving cash for inspection gaps, moving costs, or future repairs. Another buyer may use down payment assistance on an FHA loan, then compare that against a conventional option with a low down payment. The best answer depends on the full file, not a headline minimum.
I’ve seen buyers delay homeownership for years because they thought they needed 20% down. Meanwhile, prices moved up, rates changed, and the target got further away. Waiting can be smart. Waiting because of a myth usually isn’t.
When a larger down payment makes sense
There are absolutely times when putting more down is the right move.
If you’re trying to lower your debt-to-income ratio, reduce your monthly payment, avoid PMI, or qualify more comfortably, a larger down payment can solve multiple problems at once. It can also help in a competitive offer situation if the seller sees stronger financing and more cash behind the deal.
For move-up buyers selling one home and buying the next in Short Pump or Goochland, using equity from the sale may make 10% to 20% down easy and practical. In those cases, the goal isn’t just minimum cash required. It’s stronger financing structure.
Still, bigger is not automatically better. If putting 20% down leaves you with almost nothing left after closing, you’ve improved one part of your balance sheet while weakening another.
Broker shopping matters more than most buyers realize
Conventional loans are not commodity products. Rate, PMI, fees, and overlays can vary. That’s where an independent broker has a structural advantage over retail lenders and single-shelf banks.
When I work with buyers in Henrico and the greater Richmond area, I don’t have one set of conventional pricing to offer. I can shop across 500+ wholesale lenders to find the best combination of rate, mortgage insurance, and program fit. That’s the difference between being told what’s available on one shelf and actually shopping the market.
If you’ve already talked to a retail lender, get a second opinion. Use the Dare to Compare approach. Let the numbers compete.
I’m also not asking you to take a credit hit just to start the conversation. With NoTouch Credit Pull, you can review options early, see where your conventional loan down payment lands, and make a decision with better information.
The smartest down payment is the one that keeps you strong after closing
A conventional loan down payment should be sized around your full strategy, not around outdated rules. For some buyers, that’s 3%. For others, it’s 5% or 10%. For some, 20% is absolutely the right play. The key is seeing the whole picture – payment, PMI, rate, reserves, and cash-to-close – before you commit.
If you’re buying around Short Pump, Glen Allen, or the Richmond West End, don’t guess and don’t let a hard inquiry be the price of getting answers. Run the numbers, compare the real options, and keep enough cash in your corner after the keys are in your hand.
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.