Last updated October 13, 2026
You do not automatically need 20% down to buy a home in St. Louis. Depending on the loan, eligible buyers may use 0% VA financing, 3.5% FHA financing, or low-down-payment conventional options. The bigger mistake is budgeting only for the down payment: closing costs, prepaid taxes and insurance can add thousands more to the cash you need at the table.
The right down payment is the one that balances cash reserves, monthly payment, mortgage insurance and offer strength — not simply the largest percentage you can save.
Loan minimums from HUD, VA, USDA and Fannie Mae; assistance from MHDC’s 2026 program materials. See each loan ↓
As little as nothing. VA and USDA loans need 0% down for eligible buyers, FHA needs 3.5%, and conventional loans can go as low as 3%. MHDC’s assistance, the primary down payment program for St. Louis buyers, can cover much of that for buyers who qualify.
No. 20% down is the point where a conventional loan no longer needs mortgage insurance, not a requirement to buy. Most first-time buyers put down far less.
$7,500 at 3% conventional, $8,750 at 3.5% FHA, $12,500 at 5% and $50,000 at 20%. VA and USDA can be $0 for eligible buyers.
On a $250,000 home with FHA financing and MHDC assistance, a qualifying buyer might need as little as $5,000 to $8,000 out of pocket, depending on lender fees and closing costs. MHDC, the primary down payment assistance program in Missouri, offers down payment and closing cost assistance of up to 4% of the first mortgage, provided as a second loan that is forgiven gradually from year 6 and fully by year 10. On a $250,000 purchase, that is roughly $9,500 to $10,000. Income limits apply -- for 2026 in the St. Louis area, $113,500 for a 1-2 person household and $130,525 for 3+ outside targeted areas, with higher limits in targeted areas and under MHDC's Next Step program, which is also open to repeat buyers. See our MHDC guide for the details, including lender fees that can reduce the net assistance. What Assistance Does to Your Cash ↓
Closing costs, earnest money, inspection fees and cash reserves. Plan for: Beyond the Down Payment ↓
Because 20% is the threshold that eliminates mortgage insurance on a conventional loan. That is a real benefit. But it is not a requirement -- and waiting to save 20% while the market appreciates is often a losing strategy.
In 2026, the median single-family sale across 22 St. Louis County-area school districts was $333,000, so 20% would be $66,600 before closing costs. Even on a $250,000 house, 20% is $50,000. Most first-time buyers don’t have that in savings, and most don’t need it.
Here’s what each loan needs down, and what comes with it.
For eligible veterans, active duty service members, and surviving spouses, VA loans offer zero down payment with no private mortgage insurance. This is the best financing available to any buyer who qualifies -- not just because of the down payment, but because the absence of PMI saves $100 to $200 per month compared to low-down-payment conventional loans. If you have served, start here.
USDA rural development loans offer 100% financing for properties in eligible areas. Parts of Jefferson County, outer St. Charles County, and some areas of the St. Louis metro qualify. Income limits apply. Worth checking if you are considering areas like Hillsboro, De Soto, Wentzville perimeter, or other outer-ring communities.
FHA loans require 3.5% down with a 580+ credit score. On a $250,000 home, that is $8,750. The tradeoff is FHA mortgage insurance for the life of the loan if you put less than 10% down: at the standard 0.55% annual rate, about $110 a month on a $250,000 home, which you can’t cancel without refinancing.
First-time buyers can put as little as 3% down through Fannie Mae’s 97% loan-to-value option, and income-qualified buyers can use Fannie Mae HomeReady or Freddie Mac Home Possible at 3%. Repeat buyers typically need 5%. Most lenders still look for a 620 credit score. PMI on conventional loans can be canceled as you build equity, a real long-term advantage over FHA (how PMI cancellation works).
On a $250,000 home with FHA financing and MHDC assistance, a qualifying buyer might need as little as $5,000 to $8,000 out of pocket, depending on lender fees and closing costs. MHDC, the primary down payment assistance program in Missouri, offers down payment and closing cost assistance of up to 4% of the first mortgage, provided as a second loan that is forgiven gradually from year 6 and fully by year 10. On a $250,000 purchase, that is roughly $9,500 to $10,000. Income limits apply -- for 2026 in the St. Louis area, $113,500 for a 1-2 person household and $130,525 for 3+ outside targeted areas, with higher limits in targeted areas and under MHDC's Next Step program, which is also open to repeat buyers. See our MHDC guide for the details, including lender fees that can reduce the net assistance.
That out-of-pocket figure is the down payment left after assistance, plus any closing costs the assistance doesn’t cover. It’s very different from the $50,000 that 20% down would require.
The full breakdown of MHDC, HomeSTL, and other assistance programs available in St. Louis right now. First-Time Buyer Programs in St. Louis → → 2026 income limits, lender fees, the 60-day reservation deadline, seller documents and 15 questions to ask before you make an offer. MHDC First Place & Next Step: The Complete Guide → →Closing costs, earnest money, inspection fees and cash reserves. Plan for:
Cash to close is one part of the plan. For the order everything happens in, see the St. Louis buying process from pre-approval through closing.
The full breakdown of what St. Louis buyers actually pay at closing beyond the down payment. Buyer Closing Costs in St. Louis → →For most St. Louis buyers, somewhere between 5% and 10%. Putting less down means a larger loan, more interest over time, and mortgage insurance costs until you reach sufficient equity. Putting more down means lower monthly payments, less total interest, and potentially avoiding mortgage insurance -- but less cash on hand for repairs and reserves after closing.
That middle range keeps the loan and PMI manageable without depleting reserves entirely. Buying a home with zero reserves and a perfect budget leaves you exposed to the first major repair bill. In a market with significant older housing stock, that bill has a way of arriving within the first year.
Know your number? Take it to the showing. My walk-through tool flags repairs room by room and totals the 2026 expected costs, so you can see whether a house still fits your budget once you add what it needs. Save or email your results to compare houses.
Where the money comes from
Yes. Conventional and FHA loans both allow gift funds from family members and certain other donors. Your lender will want a signed gift letter and a record of the transfer, and the money has to be a true gift, not a loan you’ll repay.
Because 20% is the threshold that eliminates mortgage insurance on a conventional loan. That is a real benefit. But it is not a requirement -- and waiting to save 20% while the market appreciates is often a losing strategy. The 20% Myth ↑
The 2026 median single-family sale across 22 St. Louis County-area school districts was $333,000. That’s $9,990 at 3% down, $11,655 at 3.5% FHA, $16,650 at 5% and $66,600 at 20%.
Yes. Earnest money, typically about 1% of the price on a financed purchase in St. Louis, is credited toward your down payment and closing costs at closing. It isn’t an extra cost on top of them. How much earnest money to offer →
An IRA, partly: first-time buyers can withdraw up to $10,000 over a lifetime without the 10% early-withdrawal penalty, though income tax still applies. That exception doesn’t cover 401(k) withdrawals, but many 401(k) plans let you borrow against your balance. Talk to a tax professional before you touch retirement money.
Choosing your amount
For most St. Louis buyers, somewhere between 5% and 10%. Putting less down means a larger loan, more interest over time, and mortgage insurance costs until you reach sufficient equity. Putting more down means lower monthly payments, less total interest, and potentially avoiding mortgage insurance -- but less cash on hand for repairs and reserves after closing. Small Down vs. Large Down ↑
Six months of house payments, in my experience, regardless of what your loan program requires, after the down payment and closing costs are paid. Lenders often ask for two or three months. Older St. Louis houses tend to need a repair in the first year, and reserves are what keep that from becoming a crisis.
This is one piece of the St. Louis home buying process. See how it all fits together:
📚 Complete St. Louis Buyer Guide →
Grew up in South St. Louis, lived in Dogtown for 6 years, now in South County. You'll find us at Wellspring on Lindbergh on Sundays. I'm not selling you a house — I'm showing you how to think about buying or selling a house.
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