According to a recent article by The National Association of Realtors, there is a common misconception that buying a home requires a 20% down payment.
“The average down payment on a purchase mortgage was just 11 percent in 2016. And that’s just the average; often times down payments are much lower. For borrowers under the age of 35, the average down payment was just under 8 percent, according to NAR’s survey. But there are many mortgage options that offer the opportunity to make low or even no down payments. For example, the Department of Veterans Affairs and the U.S. Department of Agriculture offer no-money down loans to those who are eligible. In 2016, 16 percent of buyers under the age of 35 put no money down on their home purchase.
NAR’s Profile of Home Buyers and Sellers has shown that the median down payment for first-time buyers has been 6 percent for three straight years and 14 percent for repeat buyers in three of the past four years. However, when asked about the amount of a down payment needed to purchase a home, a remarkable 87 percent of non-owners indicated that a down payment of 10 percent or more is necessary.”
In addition to the loan programs mentioned in the article like FHA and USDA Rural Development, there are some local banks that offer in-house loan programs with down payments in the 5%-10% range.