One of the most common misconceptions in real estate is that you must have a 20% down payment to buy a home. While putting 20% down can help you avoid private mortgage insurance (PMI) and lower your monthly payments, it’s not a requirement. Matter of fact it's not even close.

In fact, many buyers, especially first time homeowners purchase with much less. Some popular loan options include:

• FHA Loans: As little as 3.5% down

• Conventional Loans: Options starting at 3% down

• VA & USDA Loans: 0% down for qualified buyers

These programs are designed to help people get into homes without needing to save for years. And yes, even with less than 20% down as you can see in the chart below where first time homebuyers are putting down 9% on average.

Down Payment Assistance Programs Could Get You Into A Home Sooner!

Believe it or not, almost 80% of first-time homebuyers qualify for down payment assistance (DPA), but only 13% actually use it (see chart below):

That’s a lot of missed opportunity. These programs aren’t small scale help. Some offer thousands of dollars that can go directly toward your down payment. As Rob Chrane, Founder and CEO of Down Payment Resource, shares:

“Our data shows the average DPA benefit is roughly $17,000. That can be a nice jump-start for saving for a down payment and other costs of homeownership.”

Imagine how much further your homebuying savings would go if you were able to qualify for $17,000 worth of help. In some cases, you may even be able to stack multiple programs at once, giving what you’ve saved an even bigger lift. These are the type of benefits you don't want to leave on the table. 

Bottom Line:

Saving up for your first home can feel like a lot, especially if you’re still thinking you have to put 20% down. The truth is that’s a common myth. Many loan options require much less, and there are even programs out there designed to boost your savings too.

To learn more about what’s available and if you’d qualify for any down payment assistance programs, simply send us an email at info@tfrwi.com or give our office a call at 608-846-5253.