How Much Down Payment Do You REALLY Need for New Construction in Clarksville?

If I had a dollar for every time someone told me they were "waiting to save up 20% down payment" before buying a new construction home in Clarksville, I could probably buy a house myself!

Here's the truth that might surprise you: Most buyers don't need anywhere close to 20% down to buy new construction.

In fact, some qualified buyers can purchase a brand new home with absolutely zero money down. Let me break down exactly what you need to know about down payments for new construction in the Clarksville area.

Let's start by busting the biggest misconception I hear: that you need 20% down to buy a home, especially new construction.

This simply isn't true.

While 20% down does have its benefits (which I'll explain later), the reality is that most buyers in Clarksville are purchasing new construction homes with far less—sometimes with nothing down at all.

This myth is particularly damaging because it keeps qualified buyers on the sidelines for years, renting and waiting, when they could already be building equity in a brand new home.

So where does the 20% number come from? It's an outdated standard from decades ago that still circulates in casual conversation. The truth is, today's lending landscape offers numerous options for buyers at every financial level.

Let me walk you through the actual down payment requirements for new construction, from lowest to highest:

If you're eligible for a VA loan (active military, veterans, or qualifying spouses), you can purchase new construction with zero down payment.

That's right—$0 down on a brand new home.

Every builder in the Clarksville area works with VA loans, and this benefit alone makes homeownership immediately accessible for many military families in our Fort Campbell community.

Key benefits beyond 0% down:

FHA loans require just 3.5% down, making them an accessible option for many buyers.

On a $300,000 new construction home, that's only $10,500 down—far more achievable than the $60,000 you'd need for 20% down.

But here's where it gets even better: Down payment assistance programs can help cover this cost.

The Tennessee Housing Development Agency (THDA) offers down payment assistance programs that can help eligible buyers with their FHA down payment and closing costs. This means your out-of-pocket expense could be even less than that 3.5%.

Who might benefit from FHA loans:

Conventional loans can require as little as 3% down for qualified buyers.

On that same $300,000 home, you'd need just $9,000 down—even less than the FHA option.

Benefits of conventional loans:

The 3% conventional option is particularly attractive for buyers who have good credit but limited savings, or those who prefer conventional financing.

Now, if you do have 20% or more to put down, there's a significant advantage: you won't pay private mortgage insurance (PMI).

PMI typically costs between 0.5% to 1% of the loan amount annually, which on a $300,000 loan could be $125-$250 per month. Avoiding PMI keeps your monthly payment lower.

However—and this is important—having 20% saved doesn't mean you must put it all down. Many financially savvy buyers choose to put down less and keep cash reserves for:

The right choice depends on your individual financial situation and goals.

Remember those builder concessions I mentioned in my last post? The ones offering up to $35,000 in certain communities like Sterling Acre Farms?

Here's an important clarification: Builder concessions cannot be used for your down payment.

However, they can be used for:

This is strategic because while the concessions can't cover your down payment, they can dramatically reduce your other upfront costs and monthly payments. When combined with a low down payment loan option (0%, 3%, or 3.5%), you can purchase new construction with very little money out of pocket.

The Tennessee Housing Development Agency (THDA) offers programs that can help eligible buyers with down payment and closing costs. These programs are particularly helpful when combined with FHA or conventional loans.

How it works:

I work with lenders who are experienced with THDA programs and can help you determine if you qualify and which program might be the best fit for your situation.

While we're talking about upfront costs, let's address closing costs, which are separate from your down payment.

Closing costs typically range from 2-5% of the purchase price and cover things like:

Here's the good news for new construction buyers: Those builder concessions we discussed can cover most or all of your closing costs, significantly reducing what you need to bring to closing.

Here's my advice based on working with buyers at every financial level:

If you have limited savings:

If you have 20% or more saved:

For everyone:

If you've been putting off buying new construction because you think you need 20% down, I hope this post has opened your eyes to the reality: You have options, and you might be ready sooner than you think.

Whether you're using a VA loan with 0% down, an FHA loan with 3.5% down (possibly covered by THDA), or a conventional loan with just 3% down, new construction in Clarksville is more accessible than you've been led to believe.

And with current builder concessions (up to $35,000 in some communities) covering closing costs and buying down your interest rate, the financial barrier to homeownership is lower than it's been in years.

I work with buyers considering both new construction and existing homes throughout the Clarksville area. Whether you have 0% saved or 20% saved, I can help you understand your options and find the right home for your situation.

Let's have a conversation about what's actually possible for you. Contact me today, and I'll connect you with experienced lenders who can give you a clear picture of your down payment options and help you create a plan to get into your new home.

No judgment, no pressure—just honest information about what you can actually do right now.