First-Time Buyer Down Payment Myth: You Don't Need 20% Down

The idea that you need to save a massive pile of cash to buy a house is the biggest myth in real estate. Many renters stay on the sidelines for years because they believe traditional advice that simply isn't true anymore. You do not need to put 20% down to become a homeowner.

The Truth About 20% Down

Putting a lot of cash down does have its perks. A 20% down payment helps avoid mortgage insurance and lowers your monthly costs. However, it is absolutely not required for most first-time buyers. Waiting to save that much cash often means you miss out on years of home appreciation.

Real Down Payment Minimums

There are multiple loan programs designed to get you into a home with very little cash upfront. Some conventional loan programs allow as little as 3% down. FHA loans require a minimum 3.5% down payment with a credit score of 580 or higher. If your score is between 500 and 579, FHA requires 10% down.

Zero Down Payment Options

If you qualify for certain government-backed loans, you might not need a down payment at all. VA loans allow 0% down, as long as the sales price isn't higher than the appraised value. USDA loans also have no down payment requirement for qualifying rural and suburban properties. Finally, various government, nonprofit, and private down payment assistance programs exist to help buyers with grants or low-cost repayable loans.

Talk to a Loan Officer at our Mortgage Brokerage to see which loan program fits your savings. You can also use our mortgage calculators to see exactly what your out-of-pocket costs will look like.

Expect to close one week early.

Frequently Asked Questions

Do I really need 20% down to buy a house?

No. While 20% down helps avoid mortgage insurance, many conventional and government loan programs require 3.5% down or less.

What's the minimum down payment for an FHA loan?

FHA loans require a minimum 3.5% down payment for borrowers with a credit score of 580 or higher.

Can I buy a house with 0% down?

Yes. VA loans and USDA loans both offer 0% down payment options for borrowers who meet the specific eligibility requirements.

Does a smaller down payment mean a worse interest rate?

Not necessarily. Government-backed loans with low down payments often have very competitive interest rates compared to conventional loans.