You Don’t Need 20% Down to Buy a Home.
You don’t need to be rich — you just need good information.
Even a small down payment can get you into a home that builds equity, stability, and future wealth.
The Biggest Myth in Homebuying
If you’ve been putting off buying a home because you haven’t saved up 20% — here’s some good news: that old rule just doesn’t apply anymore.
The 20% number is a leftover from decades ago, when mortgage options were more limited. Today, most buyers — especially first-time homeowners — put down far less. Many buyers are surprised to find out they qualify without even realizing it.
Here’s what’s actually possible right now:
Conventional loans: as little as 3% down
FHA (Federal Housing Administration) loans: 3.5% down
VA (Veterans): 0% down for qualified buyers
Conventional First-Time Home Buyers: HomeReady and Home Possible allow 3% down as well as credits toward closing costs
Conventional Community Reinvestment Act (CRA) loans: 3% down, no PMI (see below)
And that’s not all — there are state and local down payment assistance programs that can help cover part (or even all) of your upfront costs (like the inspection or closing costs).
What Happens If You Don’t Put 20% Down
If you buy with less than 20% down, your lender will typically add something called PMI — Private Mortgage Insurance — to your monthly payment.
PMI isn’t a penalty. It’s simply a small insurance premium that protects the lender until you’ve built up enough equity in your home.
Here’s what you need to know:
PMI usually costs 0.3% to 1.5% of your loan amount per year.
For most buyers, that’s $100–$250 per month, depending on credit and down payment size.
Once you reach 20% equity, you can request to remove PMI — meaning your payment goes down over time.
In other words, PMI is just a temporary cost that lets you own a home years sooner instead of waiting to save a huge down payment.
Other Sneaky Hacks
There are a few other ways that buyers are getting into homes for less, with no PMI added:
Seller Financing: your agent may be able to negotiate seller financing, which is usually 5-10% down with a lower interest rate. In that case, the seller holds the loan for 2-5 years (or more) before you must refinance. By that time, the total loan amount will be less and you’ll ideally have more cash to put down. In fact, you may even be able to use the equity you’ve built.
Lease Option: your agent may be able to negotiate a lease option, which lets a buyer rent a home now with the right (but not the obligation) to buy it later at an agreed-upon price. Part of the monthly rent may even go toward the future purchase, giving the buyer time to save or improve credit before buying. This option buys you precious time before the value of the home continues to rise.
Bottom Line
Don’t let outdated myths or scary headlines hold you back from your goals. The best way to know what’s truly affordable is to talk with a local agent and lender who can walk you through real numbers — not guesses or clickbait.
Even if you’re a few months (or years) away from buying, starting early gives you the power to plan ahead and act fast when the right home shows up.
Want to see what’s actually possible for you?
Let’s run a quick affordability snapshot — no pressure, no commitment, just facts. Click here to schedule a call.
Hi. I’m Erin.
My first passion is my family: my 3-year-old, my partner, and my two dogs. My second passion is reaching the moment when my clients realize that their next phase in life is a reality, that it’s really happening—they have successfully bought or sold a home.
It's a great honor to be an advisor during the home-buying or selling process, and I'm dedicated to navigating the market with my clients every step of the way, from pre-approval, to financing, to location strategy, to selecting the perfect place to call home.
As someone who experienced the 2008 recession, I deeply understand the emotional nature of homeownership and wealth-building. With transparency always, I seek to educate and empower my clients through clear communication, timely advice, and experience-driven data, ensuring they're able to make confident decisions.
Hope to hear from you soon,
Erin Maresko
(385) 302-2973
erin.maresko@theperry.group
The Perry Group | REAL Broker, LLC
