In answer to the question of whether homebuyers really need a 20% down payment to buy a home, I’m happy to say that no, they do not.

There are many awesome programs that allow potential homebuyers to purchase homes with down payments as low as 5%, 3%, 1%, or even 0%.

Steve Hankla from Doorway Home Loans joined me today to talk about some of these programs.

One program that many don’t seem to know much about is the VA loan program. This program is specifically for veterans of the armed forces, and requires no money down on a home. If those veterans happen to be disabled, then they can even have the VA funding fee waived, which will help reduce their monthly payment still further.

Other low money down programs include the FHA program, which requires a 3.5% down payment, and the conventional loan program, which requires a down payment somewhere between 3% and 5%.

CALHFA, the California Housing Finance Agency, has a product preferable to both FHA and conventional loans which allows homebuyers to get a home with as little as 1%—possibly even less, depending on the time of year. In fact, at the time of year when escrow accounts are at their lowest, Steve has seen people close on a $500,000 home, having paid only $500 or $600 out of pocket on the property with the right down payment assistance.

“There are many awesome programs that allow potential homebuyers to purchase homes with down payments as low as 5%, 3%, 1%, or even 0%.”

Fannie Mae’s HomeReady program for first-time homebuyers is often overlooked because of Fannie Mae’s traditional income limitations in areas where the average income is higher than other areas. The HomeReady program offers a lower monthly payment because the interest rate. The mortgage insurance is actually lower as well. It’s designed to attract people to underserved markets

Through the HomeReady program, first-time homebuyers can get into a home with as little as 3% down with no income limitations whatsoever—even if you made $500,000 per year, you would be able to take advantage of the program. What’s more is that there are tools available to help pinpoint those properties that qualify for the no-income-limit areas.

If you’re interested in a property that might need require customization due to, for example, a faulty roof or defective appliances, Fannie Mae’s HomeStyle Renovation program includes those projects.

Ultimately, you really don’t need to save up for a 20% down payment. There are plenty of great programs that will allow you to purchase with less money down, or none at all.

If you’d like to learn more about these programs, you can contact Steve Hankla at (714) 470-5626 or

Otherwise, if you’re looking to begin the process of buying a home, reach out to us here at Tim Majka Real Estate Experts. We’d be delighted to help.