Do You Really Need 20% Down to Buy a Home? Here’s the Truth for First-Time Buyers
If you’re saving up to buy your first home, it’s easy to feel overwhelmed—especially if you think you need to put down 20%. But here’s the good news: that 20% down payment rule is actually a myth for most buyers.
Let’s break it down and explore what’s really required—and how down payment assistance programs can help you get there faster.
Myth: You Must Put 20% Down to Buy a Home
Reality: Many Buyers Put Far Less
Unless your lender or loan type specifically requires 20%, chances are you can buy a home with a much smaller down payment.
For example:
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FHA loans allow as little as 3.5% down
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VA and USDA loans often require no down payment at all for qualified applicants
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Some conventional loans start as low as 3% down
As The Mortgage Reports explains:
“The 20 percent down rule is really a myth. Many homebuyers are able to secure a home with as little as 3% or even no down payment at all.”
According to the National Association of Realtors (NAR), the median down payment for first-time buyers is just 9%—far less than most people think.
You May Qualify for Down Payment Assistance—Without Realizing It
Another common oversight? Not looking into down payment assistance programs (DPAs). Nearly 80% of first-time buyers qualify for some form of assistance, yet only 13% actually use it.
That’s a huge missed opportunity.
According to Down Payment Resource, the average benefit from a DPA program is around $17,000—a major jumpstart for anyone saving for a home. In some cases, you may even be eligible for multiple programs that can be layered together.
“Our data shows the average DPA benefit is roughly $17,000,” says Rob Chrane, CEO of Down Payment Resource. “That can be a nice jump-start for saving for a down payment and other costs of homeownership.”
Why This Matters for First-Time Buyers
If you’ve been holding off on buying a home because saving 20% feels impossible, it might be time to rethink your strategy. Between low-down-payment loan options and financial assistance programs, there are more paths to homeownership than you might realize.
Bottom Line
You don’t need to put 20% down to buy a home. In fact, most first-time buyers don’t. With the help of low-down-payment loan options and down payment assistance programs, buying your first home might be closer than you think.
📲 Talk to a trusted local lender to learn more about your loan options and find out what assistance programs you may qualify for.