What Should My Down Payment Be? FHA vs Conventional in Las Vegas

Let me deal with the big one first.

You almost certainly do not need 20% down.

That belief is the single most common reason people who could buy a house in this valley are still renting. It has not been the rule for a long time, and it is not close to the rule now.

First, one thing to be clear about. I am not a lender, and this is not lending advice. What I am is the person who watches what happens to buyers after the loan closes, which is a different and useful angle on the same decision.

Conventional loans can go as low as 3% down for qualifying buyers, and 5% is very common. Under 20% down you pay private mortgage insurance, but it is not permanent. Once you have built enough equity, generally around 20%, you can typically ask to have it removed and your payment drops.

FHA loans allow 3.5% down with a credit score of 580 or higher. Between 500 and 579 you may still qualify with 10% down. The tradeoff is mortgage insurance both up front and monthly, and at the minimum down payment it generally stays for the life of the loan unless you refinance later.

VA loans, if you or your spouse served, can be zero down with no monthly mortgage insurance. If you are eligible, start here.

USDA loans exist for qualifying rural areas, which for practical purposes means outside the valley.

Down payment assistance programs and gift funds from family are also allowed in a lot of cases, which puts buying within reach for more people than expect it.

If you are eligible for VA, use VA. It is the best financing available in this country and it is not close. Nothing below applies to you.

If your credit is solid, go conventional. The mortgage insurance comes off eventually, which FHA’s generally does not at the minimum down. Over the years you plan to own the house, that difference is real money.

If your credit is still coming together, FHA is what it was built for. It is not a lesser option, it is a different door, and plenty of people walk through it and refinance into a conventional loan two or three years later once their credit and equity have caught up.

And if you can put 20% down, that is not automatically the right move. Which brings me to the part most articles skip.

Here is the pattern I see, and I see it often enough that I bring it up before anybody asks.

Somebody scrapes together every dollar they have to hit 20% and avoid mortgage insurance. On paper it is the disciplined choice. Then they close in June, the AC gives out in July, and there is nothing left.

In this valley that is not a hypothetical. An HVAC system is not optional here for four months of the year, and a house that just changed hands has a way of finding something.

What I would rather see is a down payment that leaves you with a real cushion after closing. Paying mortgage insurance for a few years while you keep some money in the bank is, for most first-time buyers, the better trade. Mortgage insurance is a monthly cost. An emergency you cannot cover is a crisis.

Also remember closing costs are separate from the down payment. People budget the down payment and get surprised by the rest.

The down payment gets all the attention and it is not the number that decides whether you are comfortable in this house.

The number that decides it is what you pay every month once you own it:

• Principal and interest
• Property taxes
• Homeowners insurance
• HOA dues, which in a lot of the newer master-planned communities here are not small
• The power bill in July and August, which in this valley is its own line item
• Something set aside for repairs

Ask your lender for that whole number, not just the mortgage payment. Then ask yourself whether it works in a bad month, not a good one. That is the test.

A smaller down payment on a house whose full monthly cost you are comfortable with beats a bigger down payment on one that keeps you up at night.

Talk to a lender before you look at houses. Not to find out your maximum, because that number is always higher than the number you want to live with. Find out what the whole monthly payment looks like at two or three price points.

It usually costs nothing and it takes one conversation.

Tell me two things. Roughly what you have saved, and what monthly payment you would be comfortable with in a bad month.

Call 702-881-6562 or email JArendt658@gmail.com. I will tell you what that combination buys in the valley right now, and I will connect you with a lender who will give you real numbers instead of a maximum. If my read is that you should wait six months and keep saving, I will tell you that.

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John Arendt, Realtor, has sold homes across the Las Vegas valley for 20 years, in Henderson, Summerlin, Southern Highlands, Anthem, Boulder City and North Las Vegas.

This article is general educational information, not lending advice, and reflects widely used loan guidelines as of 2026. Requirements, rates and programs vary by lender and change. Confirm details with a licensed mortgage professional.