If you’ve been holding off on buying a home because you think you need to save up a 20% down payment, you’re not alone—and you’re not entirely correct. While putting down 20% can help you avoid private mortgage insurance (PMI) and may lower your monthly payments, it’s not a requirement to become a homeowner.
In fact, many buyers—especially first-timers—purchase homes with significantly less down. FHA loans, for example, allow qualified borrowers to finance as much as 96.5%. Conventional loans backed by Fannie Mae and Freddie Mac can require as little as 3% down. And for veterans or active-duty military, VA loans often offer 100% financing options.
The idea that 20% down is mandatory can delay homeownership for years. Meanwhile, home prices and rents keep rising. Rather than waiting, it’s often smarter to explore what you can afford today, even if your savings aren’t where you thought they "should" be.
Here are a few key benefits of buying with less than 20% down:
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Get into your home sooner – Start building equity instead of paying rent.
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Preserve your savings – Keep cash available for moving costs, renovations, or emergencies.
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Take advantage of special loan programs – First-time buyer programs can include down payment assistance or grants.
Of course, every situation is different, and it’s important to understand how a lower down payment can affect your mortgage terms. But don’t let outdated assumptions stop you from exploring your options.
Thinking about buying? Talk to a mortgage professional to learn what’s possible—you may be closer to homeownership than you think!
