62% of Americans Think a 20% Down Payment Is Required, But It’s the #1 Myth
First-time buyers in particular can qualify for down payment assistance and down payments as low as zero dollars, as can veterans with a VA loan
NerdWallet.com is a trusted resource for consumer information, and, according to its 2025 Home Buyer Report, 62% of Americans believe that a 20% down payment is required to purchase a home. That’s the number one myth that is holding back Americans from pursuing the American dream of home ownership.
In fact, there are many programs, especially for first-time home buyers, which require zero down payment. Here in Colorado, the Colorado Housing Finance Authority (CHFA) has a website, www.WhyWaitBuyToday.com, which describes their programs for both first-time and repeat buyers with 4% down payment assistance (DPA) up to $25,000.
To qualify for DPA, you have to have a credit score of 620 or higher. The deferred DPA takes the form of a second loan with a 30-year term and a zero percent interest rate. It accrues no interest, has no monthly payments, but is due and payable upon sale, refinance or payoff of your first mortgage. Some DPA is provided as a gift and does not have to be repaid.
Since, according to NerdWallet’s report, 33% of non-homeowners say that not having enough money for a down payment is holding them back from buying a home at this time, “this misconception could be stopping them unnecessarily.”
FHA is well-known for requiring only a 3.5% down payment, but conventional loans are available with as little as 3% down payment. Veterans with a “certificate of eligibility” can get a loan with zero percent down payment for a primary residence.
USDA loans with zero percent down are also available for rural properties.
Larger down payments are always better and can avoid the added expense of purchase mortgage insurance (PMI), but once your equity reaches a certain level, conventional mortgages allow you to eliminate that expense. FHA loans maintain that expense for the life of the loan, unless your down payment was 11% or higher, in which case you can eliminate that expense once you achieve a certain equity level based on an appraisal.
So, if this myth has been keeping you from pursuing home ownership, give Wendy Renee, our in-house loan officer, a call at 303-868-1903, and she will help you achieve your American dream!