How Much Down Payment for a 400000 House in Massachusetts?

TL;DR

• Most first-time buyers can put down as little as 3% to 3.5%, which is $12,000 to $14,000 on a $400,000 house.
• Putting 20% down, or $80,000, avoids private mortgage insurance on a conventional loan but is not required.
• Budget separately for closing costs and reserves, because the down payment is only part of the cash you need to close.

As a first-time buyer, you can usually buy a $400,000 house with as little as 3% to 3.5% down, which works out to $12,000 to $14,000. So the short answer to how much down payment for a 400000 house is far less than the 20% most people assume, though how much you should put down depends on your loan type, your monthly budget and how much cash you want left after closing.

In Massachusetts, the program you choose and the type of property you buy shape the answer as much as your savings do. Here is how it breaks down.

How Much Down Payment for a 400000 House by Loan Type

These are the common minimums, with the math on a $400,000 purchase:

• Conventional, first-time buyer programs (3%): $12,000 down, $388,000 loan.
• FHA (3.5%): $14,000 down, $386,000 loan.
• Conventional at 5%: $20,000 down, $380,000 loan.
• Conventional at 10%: $40,000 down, $360,000 loan.
• Conventional at 20%: $80,000 down, $320,000 loan.
• VA or USDA (0%): no down payment if you qualify by service history or by buying in an eligible rural area.

Each step down in your down payment raises the loan amount, which raises your monthly payment and usually adds mortgage insurance. Run your own scenarios in the mortgage payment calculator with a current rate from the mortgage rates page to see the monthly difference between 3% and 10% down.

What Low Down Payments Actually Cost

Putting less than 20% down on a conventional loan triggers private mortgage insurance. The premium depends on your credit score and down payment, so ask lenders for quotes rather than relying on rules of thumb. The good news: conventional PMI can be removed once you build enough equity.

FHA works differently. It charges an upfront premium plus an annual one, and with the minimum down payment that annual premium typically stays for the life of the loan unless you refinance. FHA tends to suit buyers with thinner credit; buyers with strong credit often come out ahead with a 3% conventional loan.

In my experience, the bigger risk is not the mortgage insurance. It is closing with almost nothing in the bank and then facing a failed water heater in month two.

The Cash You Need Beyond the Down Payment

Your down payment is not your total cash to close. Plan for:

• Closing costs: lender fees, title insurance, attorney fees (Massachusetts closings are handled by attorneys) and recording fees.
• Prepaids and escrow: upfront homeowners insurance and property tax deposits, which vary widely by town.
• Deposits during the deal: in Massachusetts you typically put down an initial deposit with your offer and a larger one at the Purchase and Sale Agreement. These count toward your down payment, but you need the cash early.
• Reserves: a cushion for repairs and moving costs.

Ask every lender for an official Loan Estimate so you can compare real numbers rather than ballpark figures.

Massachusetts Factors That Change the Math

A $400,000 budget in Greater Boston often points toward condos, smaller homes or towns farther from the city. That matters for your down payment in two ways.

First, condos add a layer of approval. FHA loans require the condo project to be approved, and conventional lenders review the association's finances. A building with low reserves or pending litigation can limit your loan options. Monthly condo fees also count in your debt-to-income ratio, which can shrink what you qualify for.

Second, Massachusetts has state-backed and local down payment assistance for eligible first-time buyers, including programs through MassHousing and some municipalities. Income limits, purchase price caps and terms differ by program and change over time, so check current guidelines directly. The first-time buyer guide walks through where to start. Gift funds from relatives are also widely allowed with proper documentation.

Bottom Line

On a $400,000 house, most first-time buyers need $12,000 to $14,000 for the down payment, plus separate cash for closing costs and a reserve cushion. The right number balances a manageable monthly payment against keeping enough savings to handle the first year of ownership. If you want help mapping your savings to a realistic purchase plan, you can set up a buyer consultation here.

Common Questions

Can I buy a $400,000 house with no money down in Massachusetts?

Yes, if you qualify for a VA loan as an eligible veteran or service member, or a USDA loan in a designated rural area. Most other buyers need at least 3%, though down payment assistance programs can cover part or all of that minimum for eligible first-time buyers.

Is it better to put 20% down or keep cash in the bank?

It depends on your savings cushion and rate. Twenty percent removes PMI and lowers the payment, but draining every dollar leaves you exposed to repairs and job changes. Many buyers do better putting less down and keeping several months of expenses in reserve.

Can family help with my down payment?

Yes. Conventional, FHA and VA loans generally allow gift funds from relatives for the down payment. Lenders require a signed gift letter and a paper trail showing the money moving from the donor's account to yours, so plan the transfer early and keep statements.

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Plato Asadov (Aflatun Asadov)
Licensed Massachusetts Real Estate Salesperson, Lic. #9579004
Brokered by Steve Bremis Realty Group. Equal Housing Opportunity.
Phone: 617-302-7222 · Email: plato@realestoria.com · realestoria.com
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This article was drafted with AI assistance from Plato's research tools and reviewed by Plato before publishing. Information deemed reliable but not guaranteed; it is general education, not advice for your specific situation.