If you think you need 20% saved up before you can buy a home, I'm about to make your day a whole lot better. The 20% rule is old news.

What's actually required

Down payment depends on the loan type:

  • Conventional loan: as low as 3%
  • FHA loan: as low as 3.5% with a 580+ score
  • VA loan: 0% down for qualifying veterans and active military
  • USDA loan: 0% down in eligible rural and suburban areas

On a $350,000 home, which is realistic for Cape Coral or Fort Myers right now, a 3.5% FHA down payment is about $12,250. That's very doable for a lot of buyers, especially since SWFL sellers have been willing to help with closing costs.

What's the catch with less than 20% down?

On a conventional loan, putting down less than 20% means you'll pay PMI, private mortgage insurance. It protects the lender, not you, and it adds to your monthly payment.

Good news: PMI isn't forever. Once you build enough equity, it can come off. And on many of my deals, we find ways to keep it low or structure around it.

Don't drain your savings to hit 20%. You want cash left over for closing costs, moving, furniture, and a reserve for the unexpected. A smaller down payment with healthy reserves is usually smarter than a big down payment that leaves you broke.

Down payment assistance

Florida has down payment assistance programs, and some SWFL areas qualify for USDA's zero-down loan. Whether you fit depends on your income, the area, and the program. That's exactly the kind of thing I check for you up front.

SW Florida angle

Parts of Lehigh Acres and other outlying areas can qualify for USDA zero-down financing. A lot of buyers have no idea they're standing on eligible ground. Ask me to check the address. It's a two-minute lookup that could save you thousands.