The 20% Down Myth
First-Time Buyer Resources
You May Not Need 20% Down to Buy Your First Home
One of the biggest misconceptions in real estate is that you need a 20% down payment before you can buy a home. While putting 20% down can have benefits, many first-time buyers purchase with less. Depending on your loan type, financial profile, and available assistance programs, you may have more options than you realize.
What First-Time Buyers Are Actually Putting Down
According to the National Association of Realtors (NAR), the median down payment for first-time homebuyers is approximately 10%, which is far below the 20% many people assume they need.
That does not mean every buyer should put less down. A larger down payment may reduce your monthly payment, improve your offer strength, or help avoid mortgage insurance. But for many buyers, waiting until they reach 20% may extend their timeline unnecessarily.
Instead of asking, “Can I afford to put 20% down?”, the better question is, “What purchase strategy actually fits my finances, goals, and timeline?”
Down Payment Assistance
There May Be More Help Available Than Buyers Realize
Research from Realtor.com shows almost 80% of first-time homebuyers qualify for down payment assistance (DPA), but only 13% actually use it.
The down payment is not always something buyers have to solve completely on their own. Across the country, down payment assistance programs are continuing to expand, giving qualified buyers more ways to cover upfront costs like down payment and closing costs.
According to Down Payment Resource’s Q3 2025 Homeownership Program Index, there were 2,624 homebuyer assistance programs nationwide, the highest number the organization had recorded at the time. The report also noted that the average benefit was approximately $18,000, and that many programs are designed to serve a broader range of buyers, including first-time buyers, repeat buyers, first-generation buyers, military buyers, and moderate-income borrowers.
For a first-time buyer, that kind of assistance can make a meaningful difference. It may help reduce the amount of cash needed upfront, improve the loan structure, or make it easier to move from “someday” to a real buying plan.
Who May Qualify
Down Payment Assistance Is Not Always Limited to First-Time Buyers
Many down payment assistance programs are designed for first-time homebuyers, but the definition of “first-time buyer” may be broader than people realize. In many mortgage and assistance programs, a buyer may be considered a first-time homebuyer if they have not owned a home within the last three years.
That means someone who owned a home in the past, sold it, and has been renting for several years may still qualify as a first-time buyer under certain program rules.
Down payment assistance may also be available for specific groups, including teachers, recent graduates, military-affiliated buyers, first-generation buyers, first responders, public employees, or buyers purchasing in certain cities, counties, or targeted areas. The FDIC notes that many state housing finance agencies offer programs for the general public, while others are designed for specific buyer groups such as first-time buyers, military borrowers, veterans, or teachers.
Repeat buyers should not automatically rule themselves out either. Down Payment Resource states that over 39% of programs are available to repeat homebuyers who have owned a home within the last three years.
Most assistance programs still have rules. Eligibility may depend on income, location, purchase price, property type, occupancy, loan program, credit profile, and available funding. In many cases, the property must be owner-occupied, and buyers may need to complete a homebuyer education course before receiving assistance.
Common Types of Down Payment Assistance
Down Payment Assistance Can Change the Math
Down payment assistance programs are designed to help qualified buyers with the upfront costs of purchasing a home. These programs may help with the down payment, closing costs, or both.
Depending on the program, assistance may come in the form of:
- A grant
- A low-interest second loan
- A deferred-payment loan
- A forgivable loan
- A shared appreciation loan
- Employer, city, county, state, nonprofit, or lender-based assistance
Many buyers never use these programs because they do not know they exist, do not know where to look, or assume they will not qualify.
That is why it is important to speak with the right lender early. A strong lender can help identify which programs may apply to your situation and whether they fit the type of property you want to buy.
Why This Matters in Southern California
In markets like Westlake Village, Thousand Oaks, Calabasas, Agoura Hills, Camarillo, Moorpark, Simi Valley, and the surrounding Southern California communities, home prices can make the down payment feel like the biggest barrier to getting started.
But the actual amount needed to buy depends on several factors:
- Purchase price
- Loan type
- Interest rate
- Property taxes
- Homeowners insurance
- HOA dues, if applicable
- Mortgage insurance
- Closing costs
- Seller credits, if available
- Gift funds, if allowed
- Assistance program eligibility
A buyer with less than 20% down may still be able to purchase, but the monthly payment, cash needed to close, and offer strategy need to be reviewed carefully.
Buyer Planning
What First-Time Buyers Should Review Before Waiting Longer
- You may not need 20% down, but you do need to understand what your loan program requires.
- The purchase price matters, but the monthly payment is what you live with.
- The down payment is only one part of the cash needed to close.
- State, local, lender, employer, and nonprofit programs may be available depending on your situation.
- In a competitive market, the structure of your offer can matter just as much as the down payment.
- You may be closer than you think, or you may benefit from a few months of planning before entering the market.
Frequently Asked Questions
Do I need 20% down to buy a home?
No. Many buyers purchase with less than 20% down. The amount required depends on your loan type, qualifications, property type, and financial goals.
Is it better to put 20% down if I can?
Sometimes. A larger down payment may reduce your monthly payment, help avoid mortgage insurance, and strengthen your offer. But it is not automatically the best choice for every buyer.
What is down payment assistance?
Down payment assistance is a program that may help qualified buyers cover part of their down payment, closing costs, or both.
Can I use down payment assistance in California?
Possibly. California buyers may have access to state, local, lender, employer, or nonprofit programs, depending on eligibility and funding availability.
Should I talk to a lender before looking at homes?
Yes. A lender can help you understand your buying power, estimated payment, cash needed to close, and whether assistance programs may be available.
Disclaimer
Enabl Realty is a DBA of Moran Industries Inc. Real estate brokerage and mortgage brokerage services may be offered under separate licensing and DBAs, including Enabl Realty, Enabl Home Loans, and/or Pacific Financial. Loan programs, rates, down payment requirements, and assistance program eligibility are subject to change. Buyers should consult with a qualified mortgage professional before making financing decisions.
Before You Assume You Cannot Buy, Let’s Run the Numbers
The first step is not touring homes. The first step is understanding what is realistic. Enabl Realty can help you review your goals, connect with lending resources, and create a practical plan for your first home purchase.
You may need more time. You may need a different loan structure. Or you may be closer than you think.
Buyer Cost Calculator
What Could It Actually Cost to Buy a Home?
Enter a purchase price to estimate your potential monthly payment and upfront cash needed. This calculator is designed to give buyers a clearer starting point before they begin shopping for homes.