How Much Down Payment Do First-Time Home Buyers Really Need?

If you're a first-time home buyer, chances are you've been told that you need to save up 20% for a down payment before you can buy a house. While that might have been the standard in the past, it's no longer the reality for most buyers today. In fact, first-time home buyers often put down much less—and in some cases, nothing at all.

So how much do you really need? Let’s break it down.

The 20% Down Payment Myth

The idea that you need 20% down is outdated. While putting down 20% can help you avoid private mortgage insurance (PMI) and reduce your monthly payments, it’s not a requirement. According to recent data, the average down payment for first-time buyers in the U.S. is closer to 6% of the home’s purchase price.

Low Down Payment Loan Options

Several mortgage programs are designed specifically to make homeownership more accessible, especially for first-time buyers:

Conventional Loans – You can put as little as 3% down with some conventional loan programs, depending on your credit and financial profile.

FHA Loans – Backed by the Federal Housing Administration, these loans only require 3.5% down and are more forgiving of lower credit scores.

VA Loans – If you’re a veteran or active-duty military, VA loans require no down payment and come with favorable terms. This is one of the most powerful tools available for qualifying buyers.

USDA Loans – For eligible buyers in rural or suburban areas, USDA loans also offer 0% down payment options.

What About Down Payment Assistance?

There are thousands of down payment assistance (DPA) programs across the country—many tailored specifically to first-time home buyers. These programs can offer grants, low-interest loans, or deferred payment options that help reduce or eliminate your upfront costs.

In Florida, for example, the Florida Housing Finance Corporation offers down payment assistance for qualified buyers purchasing their first home in the state. These programs can vary by county, but they can be game-changers for those struggling to save.

How Much Should You Really Put Down?

The right down payment depends on your financial goals. A larger down payment can help lower your monthly mortgage payment and reduce your overall interest costs. But waiting too long to save a huge lump sum could mean missing out on today’s home prices and interest rates.

Here’s a general rule of thumb:

• 0% to 3.5%: Great for qualified buyers who want to enter the market quickly with minimal upfront cash

• 5% to 10%: Offers more flexibility and helps reduce PMI over time

• 20% or more: Ideal for avoiding PMI and building instant equity, but not required

The Bottom Line

First-time home buyers don’t need to wait until they’ve saved up 20%. With today’s flexible mortgage programs, low down payment options, and assistance resources, buying a home is more attainable than ever. What matters most is finding the right loan for your situation and working with a lender who understands the best path forward.

At Mortgage Pipeline, we help first-time buyers explore every option—from conventional to FHA to VA—and get the support they need to move confidently into their first home. Let us

help you get there, one step at a time.