Conventional Loan
Conventional Loan Down Payment Requirements in Utah
Reviewed by the HomeMath editorial team Updated 2026-08-06
Key takeaways
- Minimum down payment for a conventional loan is typically 3% of the purchase price.
- Putting down 20% or more eliminates the need for private mortgage insurance (PMI).
- Borrowers with credit scores below 620 usually need at least 5% down.
- Utah first‑time homebuyer programs can provide down‑payment assistance.
How much do you need to put down?
For most conventional mortgages, lenders require a minimum down payment of 3% of the home’s purchase price. This threshold is set to balance the lender’s risk while still allowing buyers with moderate savings to qualify.
Why 20% matters
When you reach a 20% down payment, the loan is considered low‑risk enough that the lender does not require private mortgage insurance (PMI). PMI protects the lender if the borrower defaults, so eliminating it reduces your monthly payment.
Credit score impact
If your credit score falls below the typical 620‑score floor, many lenders raise the minimum down payment to 5% or more. The higher equity protects the lender against the increased probability of default associated with lower credit scores.
Sources of down‑payment funds
- Personal savings are the most common source.
- Gifts from family members are allowed, but the donor must provide a signed gift letter confirming the money is not a loan.
- Some borrowers use retirement account withdrawals or 401(k) loans, subject to tax rules.
Utah‑specific considerations
In Utah, most closings are handled by title companies rather than attorneys, which can streamline the process. Additionally, the Utah Housing Corporation offers a first‑time homebuyer assistance program that can provide a grant or a low‑interest loan to cover part of the down payment, helping buyers meet the minimum requirement.
This information is general and not personalized financial advice. You should consult a qualified mortgage professional to discuss your specific situation.
FAQ
Can I use a gift from a family member for my down payment on a conventional loan in Utah?
Yes. Lenders allow gifted funds as long as you provide a signed gift letter stating the money is a gift and not a loan, and the donor’s bank statements verify the source of the funds.
What happens if I put down less than 20%?
If your down payment is below 20%, most lenders will require private mortgage insurance (PMI). You will pay a monthly premium until your loan balance reaches 78% of the home’s original value.
Do I need private mortgage insurance (PMI) in Utah if I have a conventional loan?
PMI is required on conventional loans when the loan‑to‑value (LTV) ratio exceeds 80%, regardless of the state. Utah does not have a separate rule that eliminates PMI.
Are there Utah‑specific programs that can help with my down payment?
The Utah Housing Corporation offers a first‑time homebuyer assistance program, which can provide a grant or a low‑interest loan to cover part of the down payment. Eligibility is based on income, purchase price limits, and buyer education requirements.
If my credit score is low, can I still qualify with a small down payment?
A lower credit score may increase the minimum down payment requirement to 5% or higher, and it may also result in a higher interest rate. Some lenders offer specialized programs for first‑time buyers that can accommodate lower scores with added documentation.
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