Bay Realty Blog: OK Boomer, You Don't Need 20% Down

OK Boomer, You Don't Need 20% Down

Well worth reading and learning what is available.

Remember in Alaska we some great choices to add on!

Thank you to Rob Spinosa!!! 

OK Boomer, You Don't Need 20% Down


Bound to happen from time to time in the digital age, a saying goes viral --- in this case, "OK, boomer," --- which is meant to expose a close-minded or out-of-touch opinion, thought or mindset of one generation by another (I'll let you figure out the age demographics here).  Hopefully, the topic of this blog will transcend generational differences and address the assumptions about the down payment one needs to make when purchasing a home, versus the reality of what we see every day with those who are actually buying homes.  I think you'll be surprised at the expanse between fact and fiction.


Let's start by saying that in the US, it's been widely assumed that a homebuyer must make a 20% down payment of the purchase price.  This concept has been propagated from one generation to the next and since Americans have been buying homes instead of carving them out of frontier land.  In fact, not a week goes by where we don't get a call from a prospective buyer that starts with an iteration of, "We'd like to buy our first home but we haven't saved 20% yet..." Yet, over at least the last 20 years, the average down payment across the US has hovered closer to 6 or 7% of the purchase price.  A far cry from the gold-standard 20% many buyers struggle to save.  Let's look at the number of ways that contribute to a buyer's access to lower down payments:


0% Down Payment

Veterans and those in rural areas may have access to 100% financing.  The VA loan program is a huge benefit and great way for our industry to show appreciation for those who have served our nation.  The USDA loan program has geographic restrictions, but for some may also allow access to the financing without a down payment.  VA loans also have access to 0% or reduced down payments at loan levels that exceed the nationwide, $484,350 1-unit max.


3% Down Payment

Conforming loans still permit a 3% down payment up to a loan amount of $484,350 (thus permitting a purchase price of approximately $510K at max leverage).  Yes, these loans have PMI, but they can be a great entry program for the first-time buyer, and they are not restricted to veterans, rural areas, income limitations or property types.  Conforming loans are accessible by all who qualify and programs like the Home Ready mortgage have PMI that is less expensive as well.


3.5% Down Payment

FHA loans come in at 3.5% down, and in many areas, FHA loans are the bread and butter of the market.  Borrowers with lower FICO scores, higher debt-to-income ratios and other challenges that could trip up a conforming loan, may find the FHA program to be the best fit.  And, FHA will permit 3.5% down even in high-cost areas where the conforming loan limit exceeds $484,350.  Remember that on conforming loans, even in high cost areas, once above a loan amount of $484,350, the down payment requirement steps up to 5%.


5% Down Payment

Conventional, high-balance (or super-conforming) and even jumbo will come into play with a 5% down payment.  Again, the higher loan amounts and purchase prices may not touch every state, but across the country stats have proven that this level of initial investment is closer to the norm when it comes to buying into the real estate market.


10% Down Payment

Even in super jumbo land (loan amounts that exceed the high-balance conforming limits) and up to price points that much of the country would consider absurd ($3MM+), believe it or not, a 10% down payment mortgage is an option.  And we do them with frequency here in CA.  For a while, the toughest aspect of getting a 10% down loan had nothing to do with the borrower, but instead we observed that sellers in competitive markets overlooked these offers in favor of buyers who structured their financing with a larger down payment.  Now that we've seen some softening in the higher price points, motivated sellers are again considering qualified buyers with 10% down payments.


If you examine the statistics for down payment patterns, you'll see that some states, like California, tend to trend toward the higher end of percentage down payments (approaching 20%).  This is due to higher purchase prices in many cases and the fact that those prices push out some of the programs that permit lower down payments.  But in other states (GA, for example), home prices in concert with percentage of veterans, rural areas, and so on, can push the down payment average percent below 3%.  As always, all real estate is local and you should consult with local professionals on your options.  But make no mistake, boomer or otherwise, you don't need 20% to get into most markets.  And if you have questions, send me a letter or give me a call or page me or e-mail or text or Skype or message me when you're ready to set aside your preconceived ideas and focus on the way it really is today.


Stop, hey, what's that sound? 



Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959


Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.


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Comment balloon 18 commentsDebra Leisek • November 14 2019 09:31AM


Morning Debra.

We have a program in Arkansas where they will contribute up to 10K for the down payment free of charge.  The loan will be forgiven and no payment to be made as long as the buyer stays in the home for 5 years.   

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) 9 months ago

Good morning, Debra Leisek the programs seem to plentiful for purchases today.... from 0% down to a variety of programs that are made to fit just about anyone's needs... good choice for a reblog...

Posted by Barbara Todaro, Marketing Agent for The Todaro Team (RE/MAX Executive Realty ) 9 months ago

Good morning Debra. Have less than 20% down, see a good mortgage broker and learn the possibilities! Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) 9 months ago

Hello James Dray  We have a couple of programs like that also...Good to know the dream of Home Ownership can still come true!

Its always ever Changing but still the same isnt it Barbara Todaro Thank you!

Hello Wayne Martin Well said! Good mortgage broker is essential!

thank you!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 9 months ago

Thank you very much for sharing this excellent reblog selection.

Posted by Roy Kelley (Realty Group Referrals) 9 months ago

Thank you Roy Kelley !!  Hope you and Delores have a wonderful Thanksgiving day and Dinner!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 9 months ago

Happy first day of December, Debra!

Rob Spinosa always has good information to share and your re-blog worked - I read it with interest! I am thankful, for both of you. 

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) 9 months ago

I have been thinking about you Patricia Feager, MBA, CRS, GRI,MRP 

I hope you are healing well and back on your feet with your boundless energy! 

You take care of yourself!!!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 9 months ago

Hi there Debra Leisek - this is a good one to share. We work with a lot of boomers, so this is especially apropos.  Hope you are enjoying this most magical time of the year in beautiful Homer.  D

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) 8 months ago

Hello Debb Janes EcoBroker and Bernie Stea JD 

Boomers are great to work with! I am one! Thank you very much and all the best to you and yous this holiday season

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 8 months ago

I hope you are having a very productive December.

Have a Very Merry Christmas and a Happy New Year!

Posted by Roy Kelley (Realty Group Referrals) 8 months ago

Merry Christmas to you Roy Kelley and of course Delores!

Happy Winter Solstice too!!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 8 months ago

Debra Leisek - I am wishing you a very happy, healthy, successful, and fulfilling 2020. 

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) 8 months ago

Thank you for thinking of me Patricia Feager, MBA, CRS, GRI,MRP 

You are the kindest of kind!

How are you healing? 

I wish for you the very best 2020 can bring you!!! 

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 8 months ago

Great information, thanks for sharing.  I hope 2020 is a great year for you.

Posted by Richard Weeks, REALTOR®, Broker 7 months ago

Debra, nice to see your face today on my blog, and hope you are doing well.  Happy New Year! 

Posted by Joan Cox, Denver Real Estate - Selling One Home at a Time (House to Home, Inc. - Denver Real Estate - 720-231-6373) 7 months ago

a great reblog from our friend Rob Spinosa  I did not even know he was still on this platform... it has been years since he commented on my post...Endre

Posted by Endre Barath, Jr., Realtor - Los Angeles Home Sales 310.486.1002 (Berkshire Hathaway HomeServices) 7 months ago

Hello Richard Weeks thank you I hope 2020 is wonderful for you too.

Joan Cox Hope you are doing well to and on to a very happy 2020!!

Endre Barath, Jr.  so good to see you! I have been missing you 

Happy New Year!!

Posted by Debra Leisek ( Bay Realty,Inc Homer Alaska) 7 months ago

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