One of the most common misconceptions in the homebuying process is that you need 20% down to get started. That’s simply not true. With today’s loan programs and down payment assistance options, many buyers can qualify with much less—or even zero down. When you understand what’s available, you’ll feel more confident taking the next step: getting pre-approved with a local mortgage lender.
Myths About Down Payments & Homeownership
Despite what you may have heard, down payments don’t have to be intimidating—and they definitely don’t have to be the reason you’re waiting to take action.
Some think you need a large amount saved up before you even talk to a lender. Others believe help is only available to low-income borrowers—or that you can’t use gift money from a relative or partner. The truth is, there are flexible options out there designed to meet buyers where they are.
✅ You don’t need 20% down.
Many first-time homebuyers qualify with as little as 3%–5% down—and some programs require no down payment at all. Don’t let the 20% myth delay your homeownership goals unnecessarily.
✅ Down Payment Assistance isn’t just for low-income buyers.
Some programs are income-based, yes—but many are designed to help middle-income buyers, too. In fact, NewFed’s National DPA Program is available to borrowers earning up to 140% of the area median income.
✅ You can use gift funds to cover your down payment.
In many cases, down payments can be partially or fully covered by gifts from family members or even domestic partners. Your loan officer can guide you through how to document the funds—it’s more common than you might think.
✅ You don’t need to have everything saved before you apply.
Getting pre-approved early helps you understand what’s actually required—and often unlocks options you may not know you qualify for. Talking to a lender upfront is one of the smartest first steps you can take.
What Do I Really Need to Save?
While upfront costs vary for each person and property, you can typically expect to plan for a down payment, closing costs, and home inspection costs.*
- Down Payment – It typically ranges from 0% to 20%, depending on your loan type. Some programs, including those from NewFed Mortgage, may allow lower down payments or help.
- Closing Costs – Usually 2–5% of the home’s purchase price. These can include appraisal fees, title insurance, lender fees, prepaid taxes, and more.
- Home Inspections – A general home inspection is strongly recommended. The buyer usually pays for it out of pocket before closing (often $300–$600).
Other upfront costs may include earnest money, prepaid costs, moving costs, and more. It’s important to consult with a mortgage loan officer for the full picture.
Explore Down Payment Options
There’s good news for first-time and repeat buyers alike: down payment assistance exists at nearly every level—federal, state, and even local. These programs are designed to reduce the upfront financial burden and make homeownership more accessible, especially in high-cost markets or for buyers with limited cash savings.
Many of these assistance programs come in the form of grants, forgivable loans, or deferred payment options. Some are tied to specific loan types (like FHA or USDA), while others are connected to your location or income bracket. To help buyers navigate what’s available, Fannie Mae offers a useful tool that identifies potential down payment assistance programs based on your location and eligibility. You can explore it here.
By exploring these resources early, you’ll gain a clearer picture of what’s possible—and may find that homeownership is closer than you thought.
Save with NewFed Mortgage's Down Payment Assistance Programs
NewFed Advantage Down Payment Assistance Program
This option allows eligible buyers to finance their home with 0% down, removing difficult financial barriers. Nothing should stand in the way of homeownership, and NewFed is here to help.
NewFed National Down Payment Assistance Program
If you are earning up to 140% of the area’s median income, you are potentially eligible to access up to 97% LTV down payment options. Discuss this option with our loan officers to determine if this is for you, and to increase your homebuying power.
Mortgage Loans with Down Payment Flexibility
When it comes to buying a home, one size doesn’t fit all—and neither does one loan type. The good news? There are several mortgage programs built specifically to support buyers who may not have a large down payment saved. Whether you’re purchasing in a rural area, serving in the military, or working through unique credit or identification situations, there are lending options designed to meet you where you are.
Here’s a look at some of the most accessible loan programs with flexible down payment requirements:
- FHA Loans: Insured by the Federal Housing Administration, FHA loans are ideal for buyers with lower credit scores or limited savings. Down payments can be as low as 3.5%, making this a popular option for first-time buyers or those re-entering the market.
- USDA Loans: Backed by the U.S. Department of Agriculture, these loans offer zero down payment for eligible buyers purchasing in designated rural and suburban areas. USDA loans are income-based and provide affordable financing with competitive terms.
- VA Loans: Available to eligible veterans, active-duty service members, and surviving spouses, VA loans require no down payment and no monthly mortgage insurance. These loans are a well-deserved benefit for those who’ve served—and one of the most powerful financing tools available.
- State & Local Housing Programs: Many states, counties, and municipalities offer buyer assistance through Housing Finance Agencies (HFAs). These programs often include grants or low-interest second loans for down payments or closing costs, and may also feature reduced rates or tax credits. A loan officer can help you explore what’s available in your area. Ask us about state-level programs like MassHousing!
- Alternative ID or Credit-Based Loans: Not all qualified borrowers fit a traditional credit or identification profile. For buyers without a Social Security Number, Individual Taxpayer Identification Number (ITIN) programs may offer a path to homeownership. These loans are designed to support more inclusive access to mortgage financing.
More Ways NewFed Mortgage Helps You Save
In addition to down payment assistance and flexible mortgage options, NewFed Mortgage offers a variety of exclusive savings programs designed to lower your upfront costs and reward the service, partnerships, and locations that matter most to us. Whether you’re a community hero, buying in a qualifying area, or working with one of our trusted real estate partners, we’ve built programs to support your financial goals and simplify your path to homeownership.
Here are just a few of the exclusive savings opportunities available to eligible buyers:
- Community Champions Program: If you serve the community as a first responder, firefighter, police officer, teacher, state/city employee, or a medical professional, we have loans specifically designed for you! We proudly provide preferred rates and discounted fees for all our community’s heroes, because you deserve credit for all you do for us.
- Community Lending Program: NewFed offers exclusive rate reductions or up to $4,500 towards closing costs for certain geographic areas. Check with one of our Loan Officers to see if you qualify for this program!
- NewFed Edge Program: NewFed offers exclusive discounts if you work with one of our Real Estate Partners. If you work with one of the following , you are for up to a .5 closing cost credit:
Take the First Step with Confidence
Whether you’re a first-time homebuyer exploring your options or someone ready to take the next step, NewFed Mortgage is here to help you save more and stress less. With down payment assistance, exclusive savings programs, and personalized loan guidance, our team is committed to making homeownership more accessible—no matter where you’re starting from.
Ready to see what you’re eligible for? Connect with a NewFed Loan Officer today to explore your options, ask questions, and get one step closer to owning your home with confidence.
