When thinking about the best way to save for a house, a good place to start is the down payment. While saving for a down payment can be challenging, you may not be required to save up as much as you think. Conventional wisdom is that you need to have a 20% down payment to be able to buy a home, but that's not true. While lenders prefer buyers to put down 20% of home's purchase price up front, there are plenty of mortgage options that require a much smaller down payment, including: Conventional loans: Borrowers with good credit may be able to get a Conventional loan with as little as 3% down. FHA loans: Loans backed by the government through the Federal Housing Administration. Borrowers using an FHA loan can put down as little as 3.5% of the home’s purchase price as a down payment. One thing to note about both conventional and FHA loans: you may be required to pay mortgage insurance on either of these loans. On conventional loans, you will be required to pay mortgage insurance if you put down less than 20%. FHA loans, on the other hand, require an upfront mortgage insurance payment and monthly mortgage insurance payments no matter how much you put down. There are other government loan programs in which the borrower is not required to provide a down payment at all, including VA loans, which are guaranteed by the Department of Veterans Affairs, and USDA loans, which are backed by the Department of Agriculture. Neither of those loan programs require a down payment, but eligibility is limited. Now that we have an idea about how much house we can afford and how much down payment we may need, let’s talk about how to save the money you’re going to need to buy that house.