Here Are the Options Most Buyers Never Hear About
The idea that you must have 20 percent down to buy a home still floats around like an old rule that never got updated. Yes, 20 percent has benefits. It removes private mortgage insurance, lowers your payment, and strengthens your overall profile. It is also out of reach for many buyers, especially first-timers.
Here is the truth. Most people who buy a home today put far less down. If you have been waiting because you think you will never save enough, you may be closer than you think.
Why the 20 Percent Myth Sticks
There are a few reasons this idea keeps spreading.
People repeat what their parents or grandparents did.
They hear 20 percent mentioned as the “ideal.”
It sounds safe because it creates a smaller payment.
But real life in 2024 looks different. Home prices grew faster than wages. Savings take time to build. Student loans and childcare costs are real. Thankfully, lending programs adjusted. You have more options than ever.
Low Down Payment Mortgage Options
Here are the programs many buyers use every day.
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1
Conventional Loans with 3 to 5 Percent Down
These work well for buyers with stable income and solid credit. You will have PMI, but it can be removed once you build 20 percent equity. Many of my clients choose this path because the long-term flexibility is strong.
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2
FHA Loans
FHA allows a 3.5 percent down payment and supports buyers who need more room with their credit history. It has upfront and ongoing mortgage insurance, but it also opens the door for people who feel stuck.
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3
VA Loans
If you have a military background or qualify as a spouse, VA loans offer a true zero down option. There is no monthly mortgage insurance and the terms are often the most forgiving in the market. It is one of the most powerful benefits available.
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4
USDA Loans
These loans support homeownership in eligible rural and suburban areas. They also offer zero down, but they include income limits. Many buyers are surprised at how many communities qualify.
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5
Down Payment Assistance and Grants
State and local programs, like PHFA and NJHMFA, can provide grants or forgivable loans that cover part of your down payment or closing costs. They change by county and income level, so it helps to review them early. For many buyers, this is the last piece that makes the numbers work.
How to Know What Is Right for You
Putting less down can help you buy sooner. Putting more down can lower your payment. The right choice depends on your goals, your timeline, and your comfort zone.
If saving for 20 percent takes years and pushes homeownership out of reach, a lower down payment may put you in a stronger long-term position. Equity builds over time, and waiting too long can cost more than PMI ever will.
A Real Example
I recently worked with a couple in Phoenixville who assumed they needed 20 percent down. They were renting and felt stuck. Once we reviewed their options, they used a down payment assistant program to put less down. They closed a few months later and started building equity instead of watching rent rise again.
The Bottom Line
You do not need 20 percent down to buy a home. You need a clear plan and a program that fits your financial life. A quick conversation can help you see what is available and how close you may already be.
If you want to review your numbers and explore real options, reach out anytime. I am here to help you move forward with confidence.
This is not a commitment to lend. All loans subject to underwriting approval. Certain restrictions apply. All borrowers must meet minimum credit score, loan-to-value, debt-to-income, and other requirements to qualify for any mortgage program.
CrossCountry Mortgage , LLC | NMLS 3029 | Equal Housing Opportunity All loans subject to underwriting approval. Not all applicants will qualify. This is not a commitment to lend. Example scenario is for illustrative purposes only and not a guarantee of future results. Information is for educational purposes only and not financial or investment advice.