6 Down Payment Myths That Are Keeping You From Buying Your First Home
Real Talks with Ichi · First-Time Buyer Edition
I’ve had this conversation so many times — someone tells me they’re not ready to buy yet because they don’t have 20% saved. And every time, I have to take a breath and say: that’s not actually a rule.
Down payment myths are everywhere. They’ve been floating around for decades, passed down through family conversations and outdated advice. And for first-time buyers especially, they can feel like walls — when really, they’re just fog.
Let’s clear it up. Here are the 6 biggest myths I hear, and the real truth behind each one.
Myth 1: “I need 20% down to buy a home.”
This is the big one. The truth? Many loan programs require far less. FHA loans go as low as 3.5% down, and some conventional loans allow just 3%. VA loans and USDA loans can even be 0% down for qualifying buyers. The 20% figure comes from avoiding PMI — but it’s never been a requirement to buy.
Myth 2: “If I can’t put 20% down, I shouldn’t buy.”
You can absolutely buy with less. If you put down less than 20%, your lender will require PMI (Private Mortgage Insurance) — but that’s a temporary cost, not a permanent one. Once you reach 20% equity in your home, PMI goes away. Don’t let a temporary line item stop you from building long-term wealth.
Myth 3: “Down payment assistance is only for low-income buyers.”
Many people don’t know this, but California has down payment assistance (DPA) programs that serve moderate-income buyers too — not just low-income households. Some programs are specifically designed for first-time buyers regardless of income level. It’s worth exploring what you may qualify for before assuming it’s not for you.
Myth 4: “My down payment has to come from my own savings.”
Not true. Gift funds from family members are allowed on most loan types — including FHA and conventional loans. Grants and down payment assistance programs are also valid sources. If you have family willing to help, there’s a proper way to document it and use it toward your purchase. Ask your lender.
Myth 5: “The bigger my down payment, the better the deal.”
Bigger isn’t always better. If putting more down drains your cash reserves, you’re left with no buffer for closing costs, moving expenses, repairs, or emergencies. A home purchase is just the beginning — you need to be able to sustain it. Sometimes a moderate down payment with healthy savings in the bank is the smarter move.
Myth 6: “I need perfect credit to qualify.”
Credit flexibility exists more than most people realize. FHA loans accept credit scores as low as 580 (with 3.5% down), and some programs work with scores in the 500s with a higher down payment. If your credit isn’t perfect right now, that’s a starting point — not a stop sign.
Here’s the bottom line: the biggest barrier to homeownership for most first-time buyers isn’t money or credit — it’s not knowing what’s actually possible.
I’ve been in San Francisco since 2003. I’ve watched this city change, and I’ve watched people talk themselves out of buying because they believed they weren’t ready — when they were closer than they thought.
If you’re a first-time buyer and you have questions, reach out. No pressure, no sales pitch. Just real conversation about where you stand and what your options actually are.
📩 Whether you’re local, out-of-state, or overseas — I work with buyers at every stage. I’m bilingual in English and Korean, and I’m happy to walk you through everything step by step.
Ichi Halvorson · Golden Gate Realty & Finance
ichihalvorson@goldengate365.com · goldengate365.com · @ichi.sf.realtor
This post is for informational purposes only and does not constitute legal, financial, or tax advice. Please consult a licensed professional for guidance specific to your situation.
