Water heater having a down fired combustion assembly

Disclosed is a water heater that has a water storage tank, a first pass flue tube extending from a top of the water storage tank to a bottom of the water storage tank, a down-fired burner assembly positioned to direct combustion gases into the first pass flue tube, a plurality of second pass flue tubes extending from the bottom of the water storage tank to a top of the water storage tank, and an expansion chamber positioned below the bottom of the water storage tank. The expansion chamber receives the combustion gases from the first pass flue tube and delivers the combustion gases to the second pass flue tubes. The water heater operates with a non-positive vent static pressure and with a vent gas temperature that avoids or reduces excessive condensate production in an exhaust vent connected to receive combustion gases from the water heater.