If you’ve been putting off buying a home because you think you need to save up a full 20% down payment — you’re not alone! That number gets thrown around so often that many people assume it’s a hard rule. The good news? It’s not. 

There are plenty of paths to homeownership that don’t require you to drain your savings account, and understanding your real options can make all the difference.

Where Did the 20% Myth Come From?

The 20% figure has roots in traditional mortgage lending. Lenders historically used it as a benchmark to protect themselves from risk — and buyers who hit that mark could avoid paying for private mortgage insurance (PMI). 

Over time, that guideline got repeated so often it became mistaken for a requirement. But mortgage lending has evolved significantly, and today there are many programs designed specifically to help buyers get into a home with far less upfront.

What Are Your Real Options?

Here’s a quick look at some of the most popular low-down-payment programs available to buyers in Massachusetts and New Hampshire:

• FHA Loans — Backed by the Federal Housing Administration, FHA loans allow down payments as low as 3.5% for buyers with a credit score of 580 or higher. These are popular with first-time buyers and those rebuilding credit.
• Conventional Loans with 3–5% Down — Many conventional mortgage programs — including Fannie Mae’s HomeReady and Freddie Mac’s Home Possible — allow down payments as low as 3%. These can be a great fit for buyers with solid credit.
• VA Loans — If you’re a veteran or active-duty service member, you may qualify for a VA loan with zero down payment and no PMI. It’s one of the most powerful homebuying benefits available.
• USDA Loans — For buyers in eligible rural and suburban areas (including parts of NH and MA), USDA loans also offer 0% down payment options.
• State & Local Down Payment Assistance — Both Massachusetts and New Hampshire offer programs that can help cover down payment and closing costs. These programs are often underutilized simply because buyers don’t know they exist.

So What’s the Catch?

A lower down payment does come with some trade-offs worth knowing about. You’ll likely pay PMI if you put down less than 20% on a conventional loan — typically around 0.5–1.5% of your loan amount annually — until you build enough equity to have it removed. 

You may also have a slightly higher interest rate or monthly payment. But for many buyers, getting into a home sooner and building equity over time outweighs the cost of carrying PMI for a few years.

Is 20% Down Ever the Better Choice?

Absolutely — if you have the savings and it makes sense for your situation. A larger down payment means lower monthly payments, less interest paid over the life of the loan, and no PMI. 

In a competitive market like parts of Massachusetts and New Hampshire, a stronger offer with more money down can sometimes make the difference when there are multiple buyers. 

But it’s a personal decision, not a requirement — and your local real estate expert can help you weigh the pros and cons based on your goals.

The Bottom Line

The 20% down payment myth stops a lot of would-be buyers from even starting the process. Don’t let it stop you. Whether you’re a first-time buyer, relocating to the area, or finally ready to make your move in MA or NH, there are real, accessible programs that can help you get to the closing table sooner than you think.

Ready to explore your options? At Laffely Real Estate Associates, we know the MA and NH markets inside and out — and we’re here to help you navigate every step of the homebuying process. Give us a call today at (978) 255-4788. We’d love to chat about your homebuying goals and help you figure out just how close you really are to owning a home.