Top 5 Home Loans That Don’t Require a 20% Down Payment

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Homeownership. It's a pillar of the American Dream, and a sure sign that you've made it on your own. But when you have decided you are ready to purchase a home, saving for your down payment can be challenging. And if, like many, you’ve heard the rule of thumb is 20% for that down payment, the idea of saving that much might be an intimidating prospect – especially with rent payments on the rise. The good news is there are many options that can allow you to put down less than 20% and still own a home.

Before we explore some of those options, however, don't get us wrong: If you are in a financial position that allows you to make a down payment of 20% or more, you definitely should. It can help you avoid PMI, lower your monthly payment, and potentially give you instant equity – all good things.

But for those of you who are interested in the options, here are some highlights of several mortgage programs that help enable homebuyers to achieve their dream without putting 20% down.


conventional loan is suitable for both first-time buyers and experienced homeowners. They're an especially ideal loan choice if you have a good credit score, rewarding you with a lower interest rate. Although a conventional loan does not require 20% down, it does require a down payment, the minimum amount of which can vary depending on the lender and the borrower’s credit history. Many conventional mortgage applicants choose to put more than that minimum amount down, in order to lower their interest rate as much as possible. Conventional loans do exclude purchases of 3-4 units, and cash-out refinances.


The federal government has several programs designed to make homeownership more attainable. Federal Housing Administration (FHA) loans are the best option for many first-time buyers, especially for those trying to build credit. A popular myth is that this type of loan is only for first-time homebuyers, but that is not the case. An FHA loan can help you buy a home now versus later, with the benefit of a lower down payment. And like a conventional loan, you can't utilize FHA loans for cash-out refinances.


The federal government has aimed to make homeownership easier for all citizens, and this is especially true for veterans. VA loans are designed to reward our military – active duty, veterans and some reservists – for their service to our country. VA loans often require no money down, offer flexible qualifying guidelines, and have low closing costs. Plus, 2020 brought higher borrowing limits to buyers using VA loans.


Did we tell you how important homeownership is to the federal government? The U.S. Department of Agriculture, or USDA, has their own loan program for prospective homebuyers. This program is specifically helpful for homebuyers in rural areas concerned with their credit score or income. And it has no down payment options.

HOME (Home Ownership Made Easy) Program

At Guardian Mortgage, we also like to make homeownership a reality for as many people as possible. That is why we created the HOME Program, offering fixed-rate loans that open up homeownership possibilities for people who may not qualify for other loans, based on income.

You Too Can Own a Home

In addition to being part of the American Dream, homeownership is also a crucial part of the economy. This is why the government and lenders like Guardian Mortgage offer and participate in many programs that help make it more attainable. And as we’ve pointed out, most of them afford buyers the ability to purchase a home with little to no down payment. We have highlighted a few of the low down payment options for you today and there are more like the Guardian Saver 85. This is one of many of Guardian’s exclusive proprietary products manufactured for you. If you have any questions or want to explore your home loan options, a Guardian Mortgage Loan Originator is always ready to help.