US Down Payment for Foreign Buyers: How Much Cash You Need

Q: Can I really buy with 5% down as a foreigner?

If you are lawfully resident in the United States and it will be your main home, yes, the same minimums apply to you as to a US citizen: Fannie Mae's maximum loan is 95% of value for a one-unit main home, and 97% on a fixed-rate loan where at least one borrower is a first-time buyer. Those are ceilings, not promises. The lender also looks at your income, credit and reserves, and with less than 20% down you will usually pay private mortgage insurance.

Q: How much do I need if I live in Europe and buy a holiday home?

More than the figures on this page. They come from Fannie Mae's rules, which apply to people lawfully resident in the US. A buyer who lives abroad uses a foreign national loan, where each lender sets its own minimum. We have not found a neutral source for a typical figure, so we do not print one. Ask two or three lenders and compare.

Q: Can my parents give me the down payment?

For a main home or a second home, yes. Fannie Mae allows gifts from relatives and people with a family-type relationship, with a signed letter stating the amount and that no repayment is expected, and proof of the donor's funds. Gifts are not allowed on an investment property. With more than 80% borrowed on a second home, or on a two to four unit main home, 5% must come from your own funds.

Q: Can the seller pay my closing costs?

Partly. Sellers and other interested parties may contribute up to 3% of the price when you borrow more than 90%, 6% when you borrow between 75% and 90%, and 9% at 75% or less, for a main or second home. On an investment property the limit is 2%. Anything above the limit is treated as a price reduction.

Q: Does my money have to be in the United States?

Before closing, yes. Fannie Mae's rules require assets held abroad to be exchanged into US dollars and held in a US or state-regulated financial institution, and verified there, before the loan closes. That makes the transfer part of the timetable. Move the money early, keep every statement from the source account to the US account, and decide when to convert instead of leaving it to closing week.

At a glance

Figures last checked: 3 October 2026

Main home, living in the US: From 5% down on a one-unit home under Fannie Mae's rules, or 3% on a fixed-rate loan if at least one borrower is a first-time buyer.
Second home: At least 10% down.
Rental property: At least 15% down for one unit, 25% for two to four units.
Buyers living abroad: Outside these rules. Foreign national loans ask for more, set by each lender.
Closing costs: Typically 2% to 5% of the price, on top of the down payment.
Below 20% down: Private mortgage insurance is usually added to a conventional loan.

The down payment depends on how you will use the home

US lenders sort every purchase into one of three boxes, and the minimum down payment follows from the box. The figures below are the limits in Fannie Mae's Eligibility Matrix of August 2026, which most lenders follow for standard loans to people who live in the United States.

Use	What it means	Minimum down payment
Main home	The home you live in	5% for one unit. 3% on a fixed-rate loan if at least one borrower is a first-time buyer. 5% for two to four units.
Second home	One unit that you occupy for part of the year, keep under your own control and do not run as a rental	10%
Investment property	Owned but not occupied by you	15% for one unit, 25% for two to four units

Two warnings. First, these are the most a lender may lend, and your own file decides what you are offered. Second, the box is not yours to choose freely. A second home that is handed to a management company which controls when you can use it does not count as a second home. Describing a rental as a second home to get the lower down payment is misrepresentation on a loan application.

If you live in Europe and will stay there, none of these minimums apply to you, because standard loans are for US residents. See foreign national loans.

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Below 20%: private mortgage insurance

With less than 20% down on a conventional loan you will normally pay private mortgage insurance, as a monthly premium, an upfront premium or both. It protects the lender, not you. It does not last for ever: you can ask to cancel when the loan is scheduled to reach 80% of the home's original value, and the servicer must end it automatically at 78% if your payments are up to date.

For a European used to borrowing 80% to 100% without such a charge, this is the reason many buyers who could put down 10% choose to stretch to 20%.

The other three amounts

Closing costs

Lender fees, the appraisal, title insurance, government recording charges and taxes. The Consumer Financial Protection Bureau puts them at typically 2% to 5% of the purchase price. Local taxes can push that higher: see the location guides for places such as Philadelphia, New York and the Massachusetts islands.

Prepaid items and escrow

At closing you also pay some running costs in advance: usually the first six to twelve months of home insurance, interest for the days until your first payment, and an initial deposit into the escrow account from which the lender will pay your property tax and insurance.

Reserves

Reserves are not paid to anyone. They are savings the lender wants to see left over after closing, measured in months of the full housing payment. Fannie Mae's guide sets no minimum for a one-unit main home, and asks for more on second homes, investment properties and two to four unit homes. A borrower without a credit score on the manual route needs twelve months unless a housing payment history can be documented.

Your Loan Estimate, which the lender must send within three business days of your application, adds these up under "Estimated Cash to Close".

A worked example

Take a $500,000 main home bought by a couple living in the United States on a work visa, with 10% down.

Item	Amount
Down payment (10%)	$50,000
Closing costs (2% to 5%)	$10,000 to $25,000
Cash at closing, before prepaid items	$60,000 to $75,000
Loan	$450,000, with private mortgage insurance

Prepaid insurance, the escrow deposit and any reserves come on top and depend on the property and the lender. Use the calculator to run your own figures and see the monthly cost.

Help with the down payment

Gifts from family are allowed on a main or second home, with a gift letter and proof of the donor's funds, and not on an investment property.

Seller contributions towards your closing costs are capped at 3%, 6% or 9% of the price depending on how much you borrow, and at 2% on an investment property.

Rental income can support the loan on a rental property, but Fannie Mae counts only 75% of long-term rent, and since September 2026 only 50% of short-term rental income, and only on a one-unit investment property that is legally permitted for short lets. Borrowers need twelve months of property management experience before positive rental income counts towards qualifying.

Equity in your European home is a common source. Whether to sell or borrow against it is covered in funding a US home with European savings or equity.

Before you set your budget

Decide which box the home falls in: main home, second home or investment.
Add 2% to 5% for closing costs, plus local taxes from the location guide.
Ask the lender for prepaid items and reserve requirements in dollars.
Compare the cost of private mortgage insurance with the cost of putting down 20%.
Prepare gift letters and donor statements if family is helping.
Move funds to a US account early and keep the trail.
Leave a margin for exchange-rate movement between offer and closing.

Questions people moving from Europe ask

Can I really buy with 5% down as a foreigner?

How much do I need if I live in Europe and buy a holiday home?

Can my parents give me the down payment?

Can the seller pay my closing costs?

Does my money have to be in the United States?

Continue your research

Sources (13)

Figures and rules on this page were checked against these sources on 3 October 2026. Rates, prices and local rules change, so confirm anything you rely on before you commit.

Made, reviewed and approved by Bas Terpstra, AFM- and PGN-certified
Basterpstra B.V., Drachten, the Netherlands (AFM 12050993)

Who made this guide. Bas Terpstra makes, reviews and approves every guide, using AI tools and public sources as a starting point. Rules and figures change, so treat this as general information and confirm the details for your own situation.

This page is general information, not personal financial, legal, tax or immigration advice. Nothing here is an offer, and no rate, loan amount, approval or visa outcome is promised. Mortgage availability is subject to immigration status, income, credit, appraisal and lender criteria, and lending, tax and local rules change. Consult a licensed US lender, an immigration attorney and a cross-border tax adviser. Any property securing a loan may be at risk if payments are not made.