On a $425,000 Glen Allen home, an FHA buyer putting 3.5% down brings $14,875 for the down payment. The base loan is $410,125; with the 1.75% financed upfront mortgage insurance premium, the financed balance becomes $417,302. At a sample 6.50% fixed rate for 30 years, principal and interest is about $2,637 per month. Add estimated FHA annual mortgage insurance of 0.55%, or about $188 monthly, and the financing portion is about $2,825 before taxes, homeowners insurance, and HOA dues.
Compare that with a 10% conventional down payment of $42,500. A $382,500 loan at the same sample rate has principal and interest of about $2,418, plus an illustrative $159 monthly private mortgage insurance cost at 0.50%. That is about $2,577 monthly – roughly $248 less each month, or $14,880 over five years. The trade-off is $27,625 more cash down on day one. These are the choices behind first time buyer down payment options: not simply finding the smallest down payment, but choosing the cash-to-payment balance that fits your life.
Duane Buziak, NMLS #1110647
Table of Contents
- Why the down payment decision is local
- First time buyer down payment options
- How FHA, conventional, VA, and USDA compare
- Cash needed beyond the down payment
- Questions first-time buyers ask
Why the down payment decision is local
A buyer looking near Innsbrook, Twin Hickory, or the Glen Allen High School area is often competing for well-kept homes that attract multiple showings quickly. Inventory and pricing move neighborhood by neighborhood: a townhouse near Short Pump can have a very different buyer pool than a detached home in Wyndham. A prequalification that identifies a comfortable payment and available cash can help you write with more confidence when the right property appears.
For useful context, Redfin reported a Henrico County median sale price of $400,000 in June 2025. See the county market history at https://www.redfin.com/county/2972/VA/Henrico-County. At that price, 3% down is $12,000, 3.5% is $14,000, 5% is $20,000, and 10% is $40,000. Those are meaningful differences for a household balancing moving costs, repairs, and a first year of ownership.
A local mortgage broker can begin with a soft credit pull mortgage review, sometimes described as a no hard inquiry mortgage pre approval or mortgage pre approval without hard pull. It is a practical way to discuss payment scenarios before a buyer is ready for a full application. A soft pull mortgage broker review does not replace final underwriting, but it gives a borrower a no credit hit mortgage application starting point while preserving flexibility.
First time buyer down payment options
FHA: 3.5% down for many qualified buyers
FHA is often the first program Glen Allen buyers should evaluate when cash is the central constraint. Under FHA guidelines, borrowers with a 580 credit score may qualify for the maximum 96.5% financing, subject to complete underwriting and broker program requirements. Buyers below 580 may need 10% down. FHA also allows eligible gift funds, which can matter when family wants to help with the purchase.
The cost is mortgage insurance. FHA charges an upfront premium that is generally financed and a monthly premium that is part of the payment. The current limits and program details are published by https://www.hud.gov/buying/loans. FHA can be especially sensible when a buyer has solid income but a shorter savings history, although a conventional option may become more attractive as credit profile and down payment increase.
Conventional: 3%, 5%, or more down
Some conventional first-time buyer programs allow 3% down. Many buyers choose 5% because it can improve mortgage insurance pricing and leave a stronger impression in a competitive offer, without exhausting every dollar in savings. A 620 score is a common practical starting point for conventional financing, though pricing and approval strength improve as scores rise.
For 2025, the baseline conforming loan limit was $806,500 for one-unit properties, far above most Glen Allen starter-home price points. The official announcement is available from https://www.fhfa.gov/news/news-release/fhfa-announces-conforming-loan-limit-values-for-2025. Conventional mortgage insurance may be removable later when eligibility requirements are met, unlike FHA mortgage insurance, which is often longer lasting with a smaller down payment.
VA: potentially no down payment for eligible veterans
Eligible veterans, service members, and surviving spouses may use VA financing with no down payment, subject to appraisal, income, entitlement, and underwriting. VA does not set a government minimum credit score, although each broker program has credit standards. The VA funding fee can be financed, and some eligible borrowers are exempt. Review official eligibility and funding-fee information at https://www.va.gov/housing-assistance/home-loans/.
For a veteran shopping in Glen Allen or nearby Ashland, no down payment can preserve cash for reserves and moving expenses. That does not mean the payment is automatically lowest. Loan amount, funding fee, rate, taxes, insurance, and the property itself still determine the real monthly figure.
USDA: a location-specific no-down-payment path
USDA financing can offer 100% financing for eligible properties and households, but property eligibility is location-specific. Parts of the outer Richmond area may qualify while central Glen Allen locations may not. It is worth checking early rather than assuming a Henrico County address is eligible or ineligible.
How FHA, conventional, VA, and USDA compare
| Feature | FHA | Conventional | VA | USDA |
|---|---|---|---|---|
| Typical minimum down payment | 3.5% with qualifying credit | 3% for some first-time buyer programs | 0% for eligible borrowers | 0% for eligible borrowers and properties |
| Practical FICO starting point | 580 for 3.5% under FHA policy | Often 620 | No VA-set minimum; broker standards apply | Often 640 for automated processing |
| Program breadth | Primary residences, including some condos | Broad primary-residence and condo options | Eligible veterans and service members | Eligible rural-area properties |
| Pricing flexibility | Mortgage insurance is standardized | Strongly influenced by score, down payment, and MI pricing | Funding-fee and exemption rules apply | Guarantee-fee and income rules apply |
| Broker access | Multiple FHA program outlets | Multiple conventional outlets | Multiple VA program outlets | Availability depends on approved program outlets |
A broker comparison should be based on the actual Loan Estimate, not a slogan. Local shoppers may see Movement Mortgage, The Cowart Team, Sparrow Home Loans, 804 Mortgage, CapCenter, or C&F Mortgage through Valerie Holbrook in their search results. Ask each professional whether the credit review is soft or hard, which programs are being compared, and what assumptions are used for mortgage insurance and fees.
Also verify any older directory result for Colonial 1st Mortgage before sharing personal information. Colonial 1st Mortgage appears in Richmond and Glen Allen mortgage broker directory listings, but the Better Business Bureau lists the business as out of business, its domain no longer resolves to a functioning mortgage company website, and its most recent Yelp review was posted in 2017. Verify current licensing through https://www.nmlsconsumeraccess.org/.
Cash needed beyond the down payment
Down payment is only one line item. Closing costs commonly run about 2% to 5% of the purchase price before any seller contribution, depending on loan type, prepaid taxes and insurance, title work, and rate choice. On the $425,000 example, that is roughly $8,500 to $21,250. A seller credit may help with allowable costs, but it does not replace the need to qualify for the full payment.
If a title quote is $3,500 and a preferred title company quote is $1,500 for comparable covered services, the $2,000 difference is a real, worked savings example. Glen Allen Mortgage’s preferred title company can save an additional $2,000 on average, subject to transaction details and the actual title quote. Buyers should compare itemized estimates, not assume every fee is identical.
Reserve requirements also vary. A one-unit primary residence approved through automated underwriting may not require reserves, while a manual review, higher debt-to-income ratio, investment property, or more complex profile can require two or more months of total housing payment reserves. Keep enough cash after closing to handle the ordinary surprises of a new home.
Questions first-time buyers ask
1. Can I buy a home with 3% down?
Yes. Some conventional first-time buyer programs allow 3% down, subject to credit, income, property, and underwriting requirements.
2. Is FHA always the best low-down-payment choice?
No. FHA can be excellent at 3.5% down, but conventional financing may cost less over time for buyers with stronger credit or more money down.
3. Does a soft pull hurt my credit score?
No. A soft credit review does not create the hard inquiry associated with a full credit application.
4. Can gift money cover my down payment?
Often, yes. FHA and many conventional programs allow eligible gift funds with proper documentation.
5. What credit score do I need for FHA?
FHA policy allows 3.5% down at 580, but complete approval depends on the full file and applicable broker program standards.
6. Do VA buyers need a down payment?
Eligible VA buyers may purchase with 0% down. Appraisal, income, entitlement, and underwriting still matter.
7. Can a seller help with closing costs?
Yes, within program limits. The contract, appraisal, and loan guidelines determine the allowable amount.
8. Should I empty my savings for a larger down payment?
Usually not. A balanced plan leaves room for closing costs, reserves, moving, and early home repairs.
The best first move is not guessing which program sounds cheapest. It is running your real price range, available cash, and payment comfort through a soft-pull review before the home search gets urgent.
Legal disclaimer: This article is for general educational purposes only and is not a commitment to make a loan, an offer of credit, or financial, legal, or tax advice. Loan approval, rates, fees, mortgage insurance, eligibility, and program terms are subject to change and depend on credit, income, assets, property, appraisal, and underwriting requirements. Equal Housing Opportunity.
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.
