Think You Need 20% Down to Buy a Home? Think Again.

Nov 13, 2025

One of the biggest hurdles many potential homeowners face isn’t finding the right house — it’s believing they need a huge down payment to get started. At Approved Mortgage, we want to set the record straight and help you understand your real options.

Why the “20% Down” Rule Persists — And Why It’s Misleading

For decades, the myth has persisted that you must save 20% of a home’s price to qualify for a mortgage. But that standard originated in a different market environment and isn’t required for many loan programs today.

According to National Association of Realtors®, the average down payment for first‑time buyers is only 6%–9%.

Even more encouraging:

  • Loans insured by the federal government — like FHA loans — can allow as little as 3.5% down.
  • Certain borrowers qualify for VA, USDA, or other assistance‑backed mortgages, which may require zero down payment when eligible.
  • Even many conventional loan products today offer down payments as low as 3–5% — far below the traditional 20%.

So if you’re holding off on buying because you don’t have tens of thousands in savings — you might not need to wait that long after all.

Down Payment ≠ The Whole Up‑Front Cost

Down payment is just one part of the “cash to close” equation. Other upfront expenses may include:

  • Closing costs (fees, title insurance, appraisals, etc.)
  • Prepaid property taxes and homeowners insurance
  • Escrows or reserves required by the lender

Because of these additional costs, a modest down payment may still require planning — but the total amount needed is often more manageable than many expect. FNBO+1

Down Payment Help & Assistance Programs Exist

Another reason why “20% down” may feel outdated: there are many down‑payment assistance (DPA) and grant programs available today, offered by local, state, and national organizations.

At Approved Mortgage, we help clients explore all available programs — even combining multiple types of assistance when eligible — to reduce the burden of upfront costs and make homeownership realistic sooner.

So What Should You Do Instead of Saving for 20%?

If you’re thinking of buying a home but don’t have 20% saved, here’s how to get started:

  1. Talk to a loan officer (like us) — we’ll walk you through all available loan options (FHA, conventional, VA/USDA if eligible) and let you know what down payment you actually need.
  2. Factor in all upfront costs — not just down payment, but closing costs, taxes, and insurance.
  3. Explore down payment assistance programs — grants or forgivable loans can significantly reduce what you need to bring to closing.
  4. Get pre-approved — this shows sellers you’re serious and helps you shop for homes within your budget, not just based on savings.

At Approved Mortgage — We’re on Your Side

We’re passionate about making homeownership accessible. Our goal is to help you find a loan program that fits your financial situation — not one that forces you to stretch into the 20% myth.

If the idea of buying a home feels out of reach because of savings, let’s talk about what’s really required. You may be closer to holding the keys than you think.

Ready to get started? Contact our team today for a free consultation and pre‑approval review. Let’s make homeownership happen — on your terms.