"If only I could afford the down payment, I could buy that home." You might be able to do both. An acceptable down payment might be smaller than you think (hint: less than 20%). On top of that, you might be eligible for down payment assistance.
Can I make a down payment of less than 20% of the home’s sale price?
Yes! In fact, a 2015 RealtyTrac survey showed that the average down payment was around 15%; 40% of respondents put down 10%. According to a 2015 National Association of Realtors® survey, Millennials put down an average of 7%.
With as little as 3% down, a qualified low- or moderate-income and/or first-time homebuyer (which includes former homeowners who haven’t owned in at least 3 years) could benefit from one of our Home Possible® mortgage products.
Does the whole down payment need to come from my personal savings?
No! Hundreds of programs provide down payment assistance, but eligibility requirements vary depending on your location and generally are limited to first-time and/or low- and moderate-income homebuyers. A number of programs specifically benefit veterans, Native Americans, and workers employed in education, health care, law enforcement, and firefighting.
The U.S. Department of Housing and Urban Development (HUD) gives grants to state and local organizations nationwide. These organizations, in turn, use these funds to help homeowners bridge the down payment gap. To find the programs in your area, check out HUD's listing or Down Payment Resource's handy tool.
State and local housing finance agencies (HFAs) administer many of these programs. Go to the National Council of State Housing Agencies' web site for a state-by-state listing. Or visit the National Association of Local Housing Finance Agencies' site for local-level program information.
Home Possible mortgages let you use money from sources besides your savings, including these:
What else do I need to know?
Get housing counseling. It’s helpful in any case, but some assistance programs require it. And it’s a prerequisite for a Home Possible mortgage.
And leave yourself enough of a financial cushion after buying your home to feel confident that you can afford to keep and enjoy it.
Follow this series just in time for the spring homebuying season.