Down Payment Options for First-Time Buyers in Washington State

February 22, 2017
Last updated:
April 4, 2022
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When you apply for a mortgage in Washington, you’ll need a lump sum of money in the form of a down payment. This article will outline some of the down payment options you have as a first-time buyer in Washington State.

As a first-time homebuyer in Washington State, you have a lot of options when it comes to the structure of your mortgage loan. And that applies to the down payment as well. This guide covers five key points you should know about down payments for first-time buyers in Washington.

1. A Down Payment of 20% Is Not Required in Washington State

There’s a fairly common misconception out there that first-time home buyers in Washington State need a down payment of at least 20% to buy a house. But this is inaccurate. While there are some advantages to putting 20% down, it’s certainly not a hard-and-fast rule for all home buyers.

There are a number of mortgage loan options that offer down payments as low as 3%, or even 0% if you’re in the military. And as you’ll soon learn, the money doesn’t necessarily have to come out of your own pocket.

The key takeaway is this: There’s no rule that says first-time home buyers in Washington need to make a down payment of 20%. There are many loan programs that allow for a smaller out-of-pocket investment, if that’s your priority.

2. First-Time Buyers Can Put as Little as 3% Down for Conventional

Did you know it’s possible to get a conventional home loan with a down payment as low as 3% of the purchase price? It’s true. Fannie Mae and Freddie Mac (the two government-sponsored corporations that buy and sell bundled mortgages) have programs in place that support these low down payments. Having said that, the down payment requirement will depend on your personal financial situation and the type of mortgage or home that you are getting. Those who are not first-time homebuyer will require a minimum down payment of 5%.

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3. FHA Loans Require a Minimum Investment of 3.5%

The Federal Housing Administration (FHA) mortgage insurance program is another viable option for Washington first-time buyers who prefer a low down payment. The FHA loan program has been around since the 1930s, and it’s designed to help ease the financial burden of buying a house.

With an FHA-insured loan, first-time home buyer down payments can be as low as 3.5% of the appraised value or purchase price, whichever is less. So it’s another option worth considering if you have limited funds.

4. Washington State Military Can Get 100% Financing

If you’re a first-time buyer in Washington State, and you also happen to be a member of the military or a veteran, you should consider using the U.S. Department of Veterans Affairs (VA) loan program.

This program gives back to the brave men and women who serve our country. It allows eligible borrowers to finance up to 100% of the home’s purchase price. It’s hard to beat a first-time buyer mortgage loan with no down payment requirement. That’s the primary benefit of the VA option.

5. First-Time Home Buyer Down Payments Can Be Gifted

In Washington State, first-time home buyers can obtain down payment funds from a third party, in the form of a gift. A lot of different mortgage programs allow gifted funds these days.

Basically, this is when someone gives you the money to cover some or all of your down payment expense. The money can come from a family member, a friend, an employer, or other approved donor. The person providing the funds will have to write a letter that states they don’t expect repayment. But aside from that, there aren’t any extra “hoops” to jump through.

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Questions About Mortgages in Washington?

Do you have questions about down payments for first-time home buyers in Washington State? Or how about more general questions about mortgages? Just call or email us and we’ll answer your questions. Sammamish Mortgage has been helping home buyers throughout the Pacific Northwest since 1992 providing a variety of different mortgage programs. We can help you choose the right type of loan based on your specific financing goals. Get in touch with us today!

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