“I don’t have that much cash,” lamented a credit union member. “There is no way I can put down 20% to buy a house.” So goes a stubborn misconception about down payments. A recent Forbes article noted, “There’s a big down payment myth that a lot of renters believe because they’ve heard it from their parents or other people that they need to put down 20% to buy a home.”

Fortunately, the idea that 20% down is a requirement is simply false. The question remains, however: “How much money do I need to buy a house?”

The first part of the answer depends on the loan product. For example, a typical conventional mortgage – that is, a loan your lender sells to an entity like Fannie Mae – will require a 5% down payment. First-time homebuyers can get away with putting only 3% down. On a $150,000 purchase, putting 3% down instead of 5% will save you $3,000. Then, there is the well-known FHA option. An FHA loan is insured by the federal government and usually requires 3.5%, making the down payment on our $150,000 house $5,250.

If 3% is too much, there are a few “no money down” options out there. For veterans of the US Armed Forces there is a VA loan, and for qualifying borrowers looking to buy in a rural area there is a USDA loan, both of which have no down payment. Additionally, Day Air has a No Money Down loan for qualified borrowers.

A down payment is not necessarily all of the cash you will need to buy a home. Borrowers will typically need to pay for items like closing costs and prepaids. Closing costs include items like the appraisal, recording of the mortgage, and so on. Prepaids are items the borrower must pay at the time of closing, most notably home owner’s insurance for the first year. While it is common for sellers to pay a portion of the buyer’s closing costs, borrowers should be prepared to have the down payment plus additional funds on hand in order to buy.

Also keep in mind that the down payment, in and of itself, should not be the only factor to consider. There are trade-offs with each loan program: for example, using our $150,000 scenario, a buyer might be tempted to take out an FHA loan for the 3.5% down payment; however, the FHA loan program requires borrowers to pay an up-front mortgage insurance premium at closing. Thus, it is possible for a borrower to actually shell out more cash using an FHA loan than she would have putting 5% down on a conventional loan.

Ultimately, simply be assured that you won’t have to save up a 20% cash down payment to buy a home. There are numerous options available. Borrowers should do their homework and consider the various loan features. When in doubt, seek out Day Air Credit Union‘s loan originators, who are prepared to guide you toward the best option.


Checking Accounts

Premium Perks

Freedom Checking

CashBack Checking

Direct Deposit


Savings Accounts

Savings Accounts

Super Saver

Money Market





Debit Card

Low Rate Credit Card

Rewards Credit Card

CU Rewards

Card Controls


Mobile Deposit

Online Banking

Pay Someone


Compare Rates

Vehicle Loans

Auto Loans

Refinance Your Car

Motorcycle & Jet Ski Loans

Boat & RV Loans

Mortgage & Home Loans


Refinance Your House

Home Equity Loans

Construction Loans


Personal Loans


StretchPay Loans

Student Loans

Credit Cards


Apply for a Loan

Pay a Loan

Online Bill Pay

Chat With Us

Financial Planning



Estate Planning

401(k) Rollover

Retirement Planning

Day Air Insurance

Auto Insurance

Home Insurance

Identity Theft Protection

Life Insurance

More Products & Services


Financial Counseling

Credit Reports

Reorder Checks


Online Banking

Online Banking

Online Bill Pay

Login to Online Banking

Mobile Banking

Mobile Banking

Mobile Deposit

Pay Someone

Text Banking


Apply for a Loan

Pay a Loan


Mobile Pay

Chat With Us


Business Checking

Business Savings

Business Certificates


Business Debit Card

Business Credit Card


Commercial Loans

Term Loans

PPP Loans

Line of Credit


Business Bill Pay


Online Business Banking

Login to Business Banking

Login to PIB MLO

Business Banking App

Join Day Air

Why Choose Day Air

Membership Eligibility

Annual Member Savings

Compare Rates

Join Day Air


Community Involvement

Financial Education

Dayton VA Medical Center

Dayton Dragons

Contests & Sweepstakes


Press & News

Newsletters & Reports



Helpful Resources