You’re ready to buy a home, but fear you’ll never save enough money for the down payment. We hear this often from our first-time buyer clients. Let’s dispel some common myths and consider the realities of down payments.

#1: Most People Don’t Put Down 20%

In the first quarter of 2024, the average down payment on a home in the U.S. was 13.6%, down from a peak of 14.7% in the third quarter of 2023. In Texas, the average down payment in Q1 of 2024 was 11.2%, close to half of the 20% many wrongly presume is necessary.

The percentages are even lower for first-time homebuyers; in 2024, the median down payment for all first-timers was 9%.

#2: Down Payments Differ by Loan Type

FHA loans. Borrowers with credit scores of 580 or higher can often get FHA loans with down payments of 3.5%. People with lower credit scores can expect FHA down payments of up to 10%, while around 5% is common with FHA loans.

VA loans. As long as the sales price isn’t higher than a home’s appraised value, many VA loans don’t require any money down.

#3: There’s Down Payment Assistance

Saving cash is one way to get a down payment for a home. There are, however, thousands of other ways with down payment assistance (DPA) programs. Last year, DPA recipients benefitted an average of about $17,000 each.

You can search the wide array of federal, state, and local DPA programs using the Down Payment Resource, a national database that connects homebuyers to assistance programs.

DPA programs fall into several categories include:

  • Grants. This is money you don’t have to pay back and can come from government agencies and other organizations, both private and public. For example, Texas government employees are eligible for Public Servant Next Door grants of up to $8,000. The Texas State Affordable Housing Corporation offers grants of up to 5% for down payments to some first-time homebuyers.
  • Loans. These are often low-interest loans, deferred-payment loans, and/or forgivable loans. The Dallas Homebuyer Assistance Program, for example, offers down payment assistance as forgivable deferred loans.

To talk about the real deal on down payments for your new home, contact a member of the First United team at (972) 591-3097 or connect with us online.