One of the most common things we hear from buyers is: “We’re waiting until we have 20% down” or “My credit isn’t perfect.”

We understand the instinct to wait. But here’s the reality: many buyers can qualify with far less than 20% down, and perfect credit is not required. The key is knowing your options and choosing the loan structure that fits your budget and timeline.

Myth 1: You need 20% down

A 20% down payment can help you avoid private mortgage insurance and lower your monthly payment. But it’s not required.

Here are a few common paths buyers use today:

• Conventional loans with 3% down
  Programs like Fannie Mae HomeReady can allow as little as 3% down for eligible buyers.
• Freddie Mac options with 3% down
  Freddie Mac’s resources also describe paths to buying with as little as 3% down, including Home Possible.
• FHA loans with 3.5% down (for many buyers)
  HUD guidance explains that borrowers with a Minimum Decision Credit Score of 580+ may be eligible for maximum financing, while 500–579 is limited to 90% LTV, and below 500 is not eligible.
• VA loans (0% down for eligible buyers)
  VA notes that nearly 90% of VA-backed loans are made with no down payment.

Myth 2: You need perfect credit

Perfect credit is not the requirement. But credit can impact your interest rate and monthly payment.

The most helpful way to think about credit is this: it’s a snapshot, and it’s improvable. A good lender can often outline exactly what would move the needle most in the next 60–180 days.

For FHA specifically, HUD’s guidance is clear about the key thresholds: 580+ for maximum financing, 500–579 limited to 90% LTV, and below 500 not eligible.

The tradeoff when you put less than 20% down

The most common tradeoff is mortgage insurance.

• Conventional loans often include PMI when you put down less than 20%.
• FHA loans include mortgage insurance costs as part of the structure.

For many buyers, this is a strategic way to buy sooner, start building equity, and secure a home that fits their life. Many buyers decide buying sooner, building equity, and locking in a home that fits their life is worth the monthly difference.

Bottom line

You do not need 20% down or perfect credit to buy a home. You do need a plan, the right loan match, and a monthly payment that feels comfortable for your budget.

Why Work With The Goodhart Group

Financing details matter, especially with low down payment options. We help you understand your real choices, coordinate with a trusted lender, and build a smart strategy so you can move forward with clarity and confidence!

Get in touch by filling out the form below or reaching out by phone or email.

Sue Goodhart | sue@thegoodhartgroup.com

Allison Goodhart DuShuttle | allison@thegoodhartgroup.com

Phone: 703-362-3221

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