If you've been waiting to buy until you've saved 20% down, this is the most important thing you'll read this week: you almost certainly don't need it. Here's what a down payment actually requires in 2026.
The 20% myth, busted
Somewhere along the way, "20% down" became gospel. In reality, the typical first-time buyer puts down far less — often in the single digits. The 20% figure isn't a requirement to buy a home; it's the threshold for avoiding private mortgage insurance on a conventional loan. Useful to know, but a very different thing from "you can't buy without it."
Waiting to hit 20% can cost you more than it saves — through years of rising home prices and rent you'll never get back.
What you can actually put down
Depending on the loan you qualify for, your minimum down payment may be much lower:
- Conventional loans — as little as 3% down for many buyers (and special programs for first-time and moderate-income buyers).
- FHA loans — 3.5% down with more flexible credit requirements.
- VA loans — 0% down for eligible veterans, active-duty service members, and some surviving spouses.
- USDA loans — 0% down in eligible rural and many suburban areas.
Which one fits depends on your credit, income, location, and goals — exactly the kind of thing a good local agent and lender sort out with you.
Down payment assistance is real money
There are thousands of down payment assistance (DPA) programs across the country — grants, forgivable loans, and low-interest second loans run by state housing agencies, cities, and nonprofits. Many are aimed at first-time or moderate-income buyers, and plenty of people who qualify never apply simply because they don't know the programs exist.
A local agent who knows your market can point you to the programs that actually apply where you're buying.
The PMI trade-off
If you put less than 20% down on a conventional loan, you'll usually pay private mortgage insurance (PMI). Two things to know: it's typically a modest monthly amount, and it isn't permanent — on conventional loans it generally drops off once you reach about 20% equity. For many buyers, paying PMI for a few years beats spending those same years renting while prices climb.
So how much should you actually put down?
There's no single right answer — it's a trade-off:
- More down = lower monthly payment and less (or no) PMI.
- Less down = you buy sooner and keep more cash in reserve.
The one rule worth keeping: don't drain your savings to the dollar. Hold an emergency fund and budget for closing costs and moving. Buying a home you can't comfortably carry is the real risk — not a smaller down payment.
Want help mapping your real options?
Tell me a little about your move and I'll match you — free — with a vetted local agent who knows the loan programs and assistance available in your market.
This article is general educational information, not financial, lending, tax, or legal advice. Loan programs, rates, and requirements vary by lender, location, and your situation — always confirm details with a licensed mortgage professional. Stacey Scantlin is a REALTOR® with JBGoodwin who connects you with a vetted local agent; she does not originate loans.
Down payment questions, answered
Do I really need 20% down to buy a house?
No. 20% is the threshold for avoiding PMI on a conventional loan, not a requirement to buy. Many buyers put down 3–3.5%, and some qualify for 0% down through VA or USDA loans.
What is the lowest possible down payment?
Eligible VA and USDA borrowers can buy with 0% down. Otherwise, conventional loans start around 3% and FHA around 3.5%, depending on your qualifications.
Will I have to pay PMI forever?
On conventional loans, no — PMI generally falls off once you reach roughly 20% equity. FHA mortgage insurance works differently, so ask your lender about the specifics of each loan.
Are down payment assistance programs legitimate?
Yes. Many are run by state housing finance agencies, cities, and established nonprofits. A knowledgeable local agent and lender can help you find programs you actually qualify for.