Do I Have to Put 20 Percent Down to Buy in Florida?

By Nelson Cruz, P.A. | November 12, 2026

No. A fixed-rate conventional loan on a one-unit primary home goes to 97 percent of value, which is 3 percent down, and FHA goes to 96.5 percent, which is 3.5 percent down. VA and USDA guaranteed loans allow zero. What 20 percent actually buys you is the absence of mortgage insurance, and the rules for getting that insurance removed later are written into federal law, with one loan type where paying the balance down will never remove it.

The minimum down payment by loan type

Credit score, debt-to-income ratio and reserves still decide whether you are approved at the minimum, and a lender may impose stricter terms than the program allows.

The conventional maximums come from Fannie Mae’s Eligibility Matrix dated August 5, 2026. The FHA minimum is statutory: 12 U.S.C. 1709(b)(9)(A) requires a cash investment of not less than 3.5 percent of appraised value. The VA funding fee table has been in effect since April 7, 2023.

How long am I stuck paying mortgage insurance?

On a conventional loan, the answer is set by the Homeowners Protection Act, 12 U.S.C. 4901 and 4902, and it uses three different dates. All three are measured against original value, defined as the lesser of the contract sales price or the appraised value at the time the loan was consummated. A later increase in your home’s value does not move these dates.

• The cancellation date, 80 percent. You may request cancellation in writing when the balance is first scheduled to reach 80 percent of original value, or when it actually reaches 80 percent through the payments you have made. The servicer must honor it if you have a good payment history, are current, and meet any requirement for evidence that value has not declined and a certification that no subordinate lien encumbers your equity.
• The termination date, 78 percent. Insurance ends automatically, with no request from you, on the date the balance is first scheduled to reach 78 percent of original value, provided you are current that day. This one is measured solely on the initial amortization schedule and irrespective of your actual balance, so extra principal payments do not pull this date forward.
• Final termination at the midpoint. If neither date has arrived, the requirement cannot be imposed past the first day of the month after the midpoint of the loan’s amortization period, if you are current. On a 30-year loan that is month 180.

Take a $400,000 purchase with 5 percent down, so a $380,000 loan, at the 30-year fixed rate of 7.18 percent Freddie Mac reported for the week ending November 5, 2026. Principal and interest is $2,574.25. The scheduled balance does not cross $320,000, the 80 percent mark, until month 132, and it does not cross $312,000, the 78 percent mark, until month 144. That is eleven years to the day you may ask and twelve years to the day it drops on its own. At 3 percent down those dates land at month 142 and month 153. Scheduled amortization is a slow machine early on, so the paydown route by itself is a decade-long plan.

The second route, and what it actually requires

A conventional loan has a second exit, this one from Fannie Mae’s servicing rules rather than the statute: borrower-initiated termination based on the current value of the property. For a one-unit principal residence or second home, the loan-to-value ratio must be 75 percent or less when the loan is between two and five years old, or 80 percent or less when it is more than five years old, and the same 80 percent applies if the two-year seasoning is waived because improvements you made raised the value. The loan must also be current, with no payment 30 or more days past due in the last 12 months and none 60 or more days past due in the last 24.

Run the same $400,000 purchase with 5 percent down through it and the test is demanding. After 24 payments the scheduled balance is $372,267.07, so clearing 75 percent needs an appraised value near $496,400, about 24 percent above the purchase price. Past the five-year mark the test loosens to 80 percent: at month 61 the balance is $357,949.69 and the value needed is about $477,300, roughly 19 percent above the purchase price. This route rewards a market that moved or improvements that appraised, and does nothing in a flat market. Ask in writing anyway, because Fannie Mae directs servicers not to solicit borrowers for it and to act only on a borrower-initiated request.

FHA is the loan where paying it down does not work

The Homeowners Protection Act defines private mortgage insurance to exclude insurance made available under the National Housing Act, title 38 and title V of the Housing Act of 1949. FHA, VA and USDA sit outside those 80 and 78 percent rights entirely, which the CFPB states in plainer words: FHA and VA loans have different requirements.

FHA’s own schedule, set by Mortgagee Letter 2023-05 and effective for case numbers endorsed on or after March 20, 2023, ties the premium’s duration to the loan-to-value ratio at origination. For a term longer than 15 years with a base loan amount at or below the national conforming loan limit, which FHFA set at $832,750 for one-unit properties in 2026:

• LTV of 90.00 percent or less: 50 basis points, for 11 years.
• LTV above 90.00 percent and up to 95.00 percent: 50 basis points, for the mortgage term.
• LTV above 95.00 percent: 55 basis points, for the mortgage term.

Put the minimum down payment into that table and the result is stark. At 3.5 percent down on a $400,000 home, the base loan is $386,000, the LTV is 96.5 percent, and the annual premium of 55 basis points, about $177 a month, is scheduled to run for all 30 years. The upfront premium of 1.75 percent, $6,755, is usually financed on top. Put 10 percent down instead and the LTV lands at exactly 90.00 percent, the rate falls to 50 basis points, and the duration becomes 11 years. One percentage point of down payment, from 9 to 10, is the difference between 11 years of premiums and 30. At minimum down on FHA, the only exits are selling or refinancing.

What to settle before you choose a number

1. Ask the loan officer to quote the same purchase price at 3, 5, 10 and 20 percent down, with the mortgage insurance premium on its own line rather than folded into the payment.
2. On a conventional quote, ask for the premium rate and the month the 78 percent automatic termination date falls on under the initial schedule. That date is knowable the day you sign.
3. On an FHA quote, ask for the LTV to two decimals. The 90.00 percent line decides whether you pay for 11 years or 30.
4. If you are VA eligible, price it against conventional with the funding fee included.
5. Decide what the cash is worth outside the deal. Reserves, closing funds and an appraisal gap compete for the same dollars, and so does the full monthly cost of ownership. If a relative is helping, source and paper the gift correctly from the start.

Frequently asked questions

Does putting 20 percent down get me a better interest rate?

It removes the mortgage insurance premium, which is a separate charge from the interest rate. The note rate is priced by the lender and by loan-level factors, so ask for the rate and the premium as two line items on one quoted price. On a $400,000 purchase at 7.18 percent, principal and interest is $2,574.25 at 5 percent down against $2,167.79 at 20 percent down, a difference of $406.46 before any premium enters the picture.

My home has gone up in value. Can I use that to drop mortgage insurance early?

Not under the federal 80 and 78 percent rights, which are locked to original value and ignore appreciation entirely. You can use it under Fannie Mae’s current-value route if the loan is conventional, the seasoning and loan-to-value tests above are met, and your payment record qualifies. The request has to come from you, in writing, to the servicer.

Is the 20 percent rule different for a second home or an investment property?

Yes. The federal cancellation and termination rights apply to a single-family dwelling that is the principal residence of the borrower on a loan consummated on or after July 29, 1999. Fannie Mae’s conventional maximums also tighten: 90 percent LTV on a one-unit second home purchase and 85 percent on a one-unit investment property purchase, and its current-value termination test for investment and two-to-four-unit properties is 70 percent LTV with more than two years of seasoning.

A down payment decision is three decisions at once: what you qualify for, what the insurance costs while it lasts, and how you plan to end it. If you are weighing those against a specific purchase price in Orange or Lake County, book a strategy session at mvphomegroup.com/nelsoncruz.

Featured image: AI-generated editorial illustration of a printed loan payment schedule with one row marked by a yellow highlighter, a pen and a paper clip on a desk. It does not depict a particular property, document or transaction.