The Myth of 20% Down — And What First-Time Buyers Are Actually Doing Instead

Let’s clear something up:

You do not need 20% down to buy a home.

That might’ve been true for your parents in the ‘90s.But in 2025? It’s a myth that’s holding too many people back.

What’s Actually Happening in Today’s Market?

Most buyers — especially first-timers — are using smart financing options that require 3%–5% down (or less).

Many of my clients are combining:

✅ 3% or 5% conventional loans

✅ Down payment assistance (CalHFA, GSFA, etc.)

✅ Seller credits

✅ Temporary buydowns

✅ Gift funds or family support

Some even close with less than $2,000 out of pocket.And yes, they’re still getting competitive homes in Southern California.

What’s Causing the Confusion?

Old info + outdated advice + social media myths.

A lot of buyers think they’re “not ready” just because they haven’t saved 20%.Truth is: waiting may cost more if rates drop or home prices keep rising.

And in markets like Orange County or LA, 20% down is often $150K+. Most people don’t have that just sitting around — nor do they need to.

Client Example (Closed Last Month):

• First-time buyer in Orange

• Used 3% conventional loan + CalHFA assistance

• Got a seller credit to help with closing costs

• Paid under $4,100 total to close

  
  

They thought they’d need to save another year.They moved into their home last week.

Agents — Let’s Shift the Narrative:

If you’re still saying “wait ‘til you’ve saved 20%” - stop. Here ’s what to say instead:

“Let’s talk to Mike and see what it really takes.”“There may be a program that helps you buy sooner.”“You might already have enough.”

This mindset shift can unlock more buyers, shorten timelines, and grow your pipeline.

Bottom Line:

20% down isn’t the requirement — it’s the myth.

Let’s talk strategy. Let’s see what’s possible.

And let’s help buyers stop waiting and start moving.