Affordability Challenges - Affordability remains a significant challenge for homebuyers due to high home prices, which necessitate large down payments [1] - In addition to down payments, buyers must also consider other out-of-pocket costs associated with purchasing a home [2] Down Payment Requirements - The minimum down payment required varies by loan type, with conventional loans typically requiring 5%, FHA loans requiring 3.5% for borrowers with a credit score of 580 or higher, and no down payment required for VHA and USDA loans [6] Closing Costs - Closing costs can add an additional 2% to 6% to the loan amount, significantly increasing the total cash needed for a home purchase [4] - For example, on a $350,000 home purchase with a 5% down payment, the buyer may face a cash shortfall of $6,500 to $19,950 after accounting for closing costs [5] Financial Strategies for Buyers - Buyers facing a cash shortfall have several options, including saving more money for a larger down payment, using gift money from family, applying for down payment assistance programs, or negotiating seller concessions to cover closing costs [8]