Don’t believe everything you hear about homebuying — especially the old “you need 20% down” rule.

While putting 20% down can help you avoid mortgage insurance, it’s not a requirement to buy a home. In fact, many homeowners today purchase with far less.

Let’s break it down:

Low and No Down Payment Options

• 0% Down – Eligible veterans and active-duty service members can take advantage of VA loans, and rural homebuyers may qualify for USDA loans—both offering zero down payment options.

• 3% Down – Fannie Mae and Freddie Mac conventional loans allow qualified buyers to purchase with as little as 3% down on most single-family homes.

• 3.5% Down – The FHA loan is one of the most popular low down payment programs. It requires just 3.5% down and is more flexible with credit scores and debt-to-income ratios.

• 5%–10% Down – Many conventional loans fall into this range, especially for buyers purchasing single-family properties.

• 10%–20% Down – Some multi-family properties and other specific loan types may require a bit more, but it’s still far from the full 20%.

What About Mortgage Insurance?

If you put less than 20% down, you may have to pay mortgage insurance (MI) or private mortgage insurance (PMI). While it’s an extra monthly cost, it often makes sense — because it gets you into a home sooner, allowing you to start building equity instead of paying rent.

Many of our clients began with a small down payment, built equity over time, and later refinanced to:

1. Remove PMI/MI,

2. Lower their interest rate, and

3. Even take cash out.

The Bottom Line

You don’t have to wait until you’ve saved 20% to buy a home. With today’s programs, you can become a homeowner with little to no money down — and start investing in your future sooner than you think.

Ready to explore your options? Reach out today, and we’ll help you find the best path to homeownership.