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The Truth About Down Payments
The Truth About Down Payments
If you’re planning to
buy your first home, saving up for all the costs involved can feel daunting, especially when it comes to the
down payment. That might be because you’ve heard you need to save 20% of the home’s price to put down. Well, that isn’t necessarily the case.
Unless specified by your loan type or lender, it’s typically not required to put 20% down. That means you could be closer to your
homebuying dream than you realize.
As
The Mortgage Reports
says:
“Although putting down 20% to avoid mortgage insurance is wise if affordable,
it’s a myth that this is always necessary. In fact, most people opt for a much lower down payment.”
According to the
National Association of Realtors (NAR), the median down payment hasn’t been over 20% since 2005. In fact, for all homebuyers today it’s only 15%. And it’s even lower for first-time homebuyers at just 8%
(see graph below):
The big takeaway? You may not need to save as much as you originally thought.
Learn About Resources That Can Help You Toward Your Goal
According to Down Payment Resource, there are also over 2,000 homebuyer assistance programs in the U.S., and many of them are intended to help with down payments.
Plus, there are loan options that can help too. For example, FHA loans offer down payments as low as 3.5%, while VA and USDA loans have no down payment requirements for qualified applicants.
With so many resources available to help with your down payment, the best way to find what you qualify for is by consulting with your loan officer or broker. They know about local grants and loan programs that may help you out.
Don’t let the misconception that you have to have 20% saved up hold you back. If you’re ready to become a homeowner, lean on the professionals to find resources that can help you make your dreams a reality. If you put your plans on hold until you’ve saved up 20%, it may actually cost you in the long run.
According to U.S. Bank:
“. . . there are plenty of reasons why it might not be possible. For some, waiting to save up 20% for a down payment may “cost” too much time. While you’re saving for your down payment and paying rent, the price of your future home may go up.”
Home prices are expected to keep appreciating over the next 5 years – meaning your future home will likely go up in price the longer you wait. If you’re able to use these resources to buy now, that future price growth will help you build equity, rather than cost you more.
Bottom Line
Keep in mind that you don't always need a 20% down payment to buy a home. If you're looking to make a move this year, reach out to a trusted real estate professional to start the conversation about your homebuying goals.
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When buying a home feels out of reach, what are some families doing instead? They're buying multi-generational homes together in Sonoma, Marin, and Napa Counties—pooling incomes to afford $773K-$1.3M medians while grandparents help with childcare. Sonoma, Marin, Napa Affordability Crunch You crunch the numbers for a Petaluma 3-bed at $958K. Add $1,800/month childcare. Something gives. Sonoma medians sit at $773K, Marin $1.3M+, Napa luxury higher. Rates near 6% help, but down payments and daycare eat budgets. Families adapt: multi-generational buys. NAR says 14% of 2025 buyers went this route—up sharply. Childcare (6%) and grandkids (12%) now top reasons. In wine country, ADU-friendly homes make it work. Katia Bidaurreta at Compass sees it daily. Her Petaluma clients buy Santa Rosa properties with in-law suites. Finance background spots the math. How Multi-Gen Living Works Here Parents, grandparents, sometimes aunts buy together. Shared mortgage. Built-in childcare. Napa vineyard views for all. Solves two problems: Splits $4,500 payments three ways. Cuts $18K/year daycare when grandma watches kids. Why It's Growing Fast Sonoma inventory up, but prices firm. Marin families priced out of Mill Valley pivot to Novato multi-gens. Napa seeks estate-style with guest houses. Your Rohnert Park starter won't cut it. Buyers want: Must-Have Home Features Downstairs primary suite Separate entrance ADU Big kitchen for family meals 4+ beds, office flex Sonoma Plaza walkable or Marin views Pool/hot tub for grandkids Petaluma farmhouses convert garages easy. Santa Rosa new builds include casitas. Questions Before You Buy Who's on title? Loan? What if grandma moves? How split utilities, repairs? Privacy enough? Exit plan in 5 years? Talk attorney first. Katia connects you—stays in real estate lane. Local Examples That Work Petaluma: $1.1M craftsman, main house + ADU. Three incomes qualify easy. Novato: $1.5M mid-century, guest wing rented for mortgage offset. Napa: $2M vineyard estate, grandparents get pool house. Katia closed similar: Portuguese family pooled for Santa Rosa 5-bed. "Made homeownership real," they said. Watch Out For These Family drama over decisions One person wants out, others can't buy Zoning limits ADU short-term rental Inheritance fights later Compass title partners smooth ownership splits. Your Next Move Multi-gen beats waiting. Sonoma's 42-day market moves if priced right.
