You Don't Have to Have 20% Down to Buy a Home

You Don't Have to Have 20% Down to Buy a Home

Navigating Down Payment Myths and Options for Homebuyers

Buying a home is often a monumental step in many people's lives. This process, however, can often be confusing, especially when it comes to the down payment. Many buyers think you need the Traditional down payment of at least 20%. In reality, there are various options available to prospective homeowners, many of which don't require a 20% down payment.

Understanding the Down Payment Options

There are several options available to homebuyers who may not have a 20% down payment. Some of these include the Federal Housing Administration (FHA) program, conventional mortgages, programs for investors, and the Veterans Association (VA) loans.

Federal Housing Administration (FHA) Program

The FHA program is one very good option. This program lets buyers to put down a minimum of three and a half percent, considerably less than the conventional 20%. However, the caveat is that the house must be in better condition, and the mortgage insurance remains on the property for the duration of the loan.

Conventional Mortgages

A conventional mortgage is another option, which typically requires a minimum of five percent down. An advantage of this option is the ability to refinance off the mortgage insurance once you've accrued 20% equity in your home.

Investors Options

For investors looking to buy properties they won't be living in, lenders typically require a down payment of 20-35%, depending on the type of property. Loan programs for such properties may also have shorter terms, ranging from 20 to 25 years. If the required down payment is not available, potential investors can explore partnership options or seek help from friends and family.

Veterans Association (VA) Loans

The fourth option available to potential homebuyers is the VA loans for veterans. This program does not require any down payment or mortgage insurance, allowing for lower scores and greater pre-approval flexibility.

Zero Down Payment Programs

The VA loan program isn't the only zero down payment program available. The United States Department of Agriculture (USDA) program is also an option. The USDA program, which supports home purchases in rural areas, is designed for civilians. However, this program comes with strict property condition requirements.

While these zero down payment programs make homeownership more accessible, potential buyers must meet specific criteria, such as income limits and property type restrictions.

Understanding the Full Cost of Homeownership

While the down payment is a significant part of homeownership costs, it's not the only thing to consider. Other monthly costs, such as mortgage insurance, taxes, and general insurance, can also add up.

Despite these costs, it can still be beneficial for buyers to enter the market and start building equity, particularly in areas with consistent property value appreciation, such as Southern Oregon, not to mention the joy of owning your own home!


Contrary to popular belief, a 20% down payment is not always necessary when purchasing a home. Various programs offer lower down payment options, making homeownership accessible to a broader demographic. However, prospective homebuyers should also consider the ongoing costs of homeownership and their ability to meet these expenses before making a final decision.

Remember to seek professional financial advice to understand what options are most suitable for your circumstances and goals. Talk to a good lender. Whether you are a first-time homebuyer or an investor, understanding the down payment options available to you can make the journey to homeownership easier  and more manageable financially.


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