If you hope to own a home some day, you may be under the impression that you need to save up for a 20 percent down payment—but the truth is, that’s just a myth.
According to data from Better, an online mortgage platform, only 17 percent of homebuyers actually put between 15 and 25 percent down — and more than a quarter (27 percent) of them put down between 5 and 10 percent. And you can put down even less, too — 3 to 5 percent down payment programs exist especially to help first-time homebuyers. The problem is, most prospective homebuyers just aren’t aware that options like this are available to them, which is one reason why many — especially those hoping to buy their first home — feel like home ownership is an impossible goal.
A 2015 Fannie Mae survey found that 76 percent of consumers were, to some degree, unaware of low down payment homebuyer assistance programs — 34 percent said they weren’t too familiar, and 42 percent weren’t familiar at all (and this was especially high among lower-income consumers, who would likely benefit from low down payment programs). Only 4 percent of those surveyed said they were very familiar with such programs.
The truth is, programs do exist to help people become homeowners — you don’t need to put 20 percent down, you just need to do some research and figure out your options.
A Note: Of course the 20 percent standard continues to exist because it’s a really solid move. The more you can put down, the better position you’ll be in, financially, for every day from here on out. You should talk to a mortgage lender or financial advisor to decide on the best path for you.
Homebuyer assistance programs differ from state to state, so to get an idea of what options are available to you where you are, there’s a handy tool you can use: HSH.com created an interactive map of the United States to help you find out about programs where you live.
Above is an example of what happens when I clicked on New York State — how many home buyer assistance programs are in my state (10!) and below this (not shown) the programs are listed with a brief description of each.
Again, here’s the full map — see what programs you could take advantage of in your state.
You can learn more about different types of mortgages in our guide.