Many first-time buyer programs require as little as 3-5% down. FHA loans need just 3.5% with a credit score of 580 or above. Some state and local programs offer down payment assistance grants or low-interest second loans. The trade-off is that lower down payments result in higher monthly costs due to PMI.

Private Mortgage Insurance (PMI) is required when your down payment is less than 20% of the home's value. It typically costs 0.5% to 1.5% of the loan amount annually, added to your monthly payment. On a $237,500 loan, PMI might add $99 to $297 per month until you reach 20% equity.

Yes, numerous programs exist at the federal, state, and local levels. FHA loans offer low down payments and flexible credit requirements. Many states offer first-time buyer grants, tax credits, or subsidized interest rates. Check with your state's housing finance agency and local HUD-approved counselors to find programs you qualify for.