If you’ve ever started looking for a home, you’ve probably asked some version of the same question: how much down payment do you really need?
Do you really need 20% down?
For years, the answer seemed simple. Save 20%, then start house hunting. But for some, that benchmark feels more like a barrier than a goal. Home prices continue to shift, rent doesn’t leave much room to save and putting aside that much cash can take longer than expected.
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"Home financing has evolved. A 20% down payment may work for some, but many buyers can achieve homeownership sooner with lower down payment options." – Blake Gray, Manager, Mortgage Business Development |
The reality is, the 20% rule isn’t as universal as it once seemed. Many homebuyers, especially first-time buyers, are getting into homes with much lower down payment requirements.
Low down payment loan options
There are many loan options designed to make that possible. A conventional loan down payment can be as low as 3% for qualified buyers. FHA (Federal Housing Administration) and Virginia Housing loan down payment requirements are typically around 3.5%, making them a popular option for buyers with moderate savings or less-than-perfect credit. Some government-backed programs, including VA (Veterans Administration) and USDA (US Department of Agriculture) loans, may not require a down payment at all for those who qualify.
One of these competitive loan options may help you move forward sooner:
- STAR (Steps Toward Achieving Results) Affordable Lending Program features 100% financing with no down payment for those who qualify if paired with our Closing the Gap second lien
- Closing the Gap Loan is a second lien mortgage designed to help cover up to 3% in closing costs or down payment assistance
- Specialized programs for attorneys and medical professionals that offer up to 100% financing with no mortgage insurance
Which of these programs is best for you depends on your needs. Some are designed for those with limited savings, buyers looking to minimize upfront costs or those who have unique buying requirements.
That doesn’t mean there aren’t trade-offs. A low down payment mortgage may come with additional costs, like private mortgage insurance on conventional loans. Still, many buyers find it’s a worthwhile trade-off if it helps them move forward sooner rather than waiting years to reach a higher savings goal.
What is down payment assistance?
Another option that’s worth exploring is down payment assistance. These programs can make a meaningful difference, especially for buyers who have steady income but haven’t built up significant savings yet.
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"There are a variety of down payment assistance programs available at the local, state and national levels. Understanding what you may qualify for can help expand your buying power." – Blake Gray, Manager, Mortgage Business Development |
Assistance can come in different forms. Some programs offer grants that don’t need to be repaid. Others provide low-interest loans or deferred loans that are only repaid when you sell or refinance. In some cases, assistance can help cover not just the minimum down payment for a home but also closing costs.
For buyers trying to understand down payment requirements in today’s market, these programs can open doors that might otherwise feel out of reach.
To find down payment assistance programs you may qualify for, please visit our Down Payment Resource page.
If you're wondering whether buying now is the right choice for you, you don't have to figure it out on your own. Talk with a lender who can help walk through your options, from low down payment mortgage programs to available down payment assistance in your area. With the right guidance, buying a home may be more within reach than you think.
Blake Gray is Manager of Mortgage Business Development for Atlantic Union Bank.
He develops and executes marketing strategies that help prospective homebuyers connect with trusted mortgage professionals and navigate their home financing journey with confidence. Outside of work, Blake enjoys soccer, fishing and spending time with his family.
This is not a commitment to lend or extend credit. All loans, credit and collateral are subject to approvals. Terms, rates, data, programs, information and conditions are subject to change without notice. Specific program restrictions may apply. Not all loans or products are available in all states.