Can I Buy a Home With Less Than 20% Down in Richmond, VA?

by Khaliyah Heaven Barakhyahu

If you're thinking about buying a home in Richmond, you may believe you need to save 20% of the purchase price before you can even start looking.

That assumption stops a lot of potential buyers before they ever talk to a lender.

The good news is that you don't necessarily need 20% down to buy a home. Depending on your finances and the loan program you qualify for, there may be mortgage options that require considerably less.

We've talked with buyers who spent years thinking homeownership was still far away because they were trying to save a 20% down payment. Once they spoke with a lender and learned about their actual options, they realized they might be able to purchase sooner than they expected.

If you're buying a home in Richmond VA, understanding your down payment options is an important first step before deciding how much you need to save.

Where Does the 20% Down Payment Idea Come From?

Twenty percent is often discussed because putting that much down can have advantages.

A larger down payment reduces the amount you need to borrow, which generally lowers your monthly principal-and-interest payment. Depending on the type of mortgage, putting 20% down may also help you avoid certain mortgage insurance requirements.

But 20% isn't a universal requirement.

There are several mortgage programs that may allow qualified buyers to purchase a home with a smaller down payment.

That's why we encourage buyers to speak with a knowledgeable lender before assuming they aren't financially ready.

Conventional Loans May Allow Less Than 20% Down

One common misconception is that conventional mortgages always require 20% down.

They don't.

Depending on the loan program and the borrower's qualifications, some conventional loans may allow much smaller down payments.

If you put less than 20% down on a conventional mortgage, you may be required to pay private mortgage insurance, commonly called PMI.

That additional expense should be included when you're calculating your monthly housing budget.

A lender can show you how different down payment amounts would affect your estimated monthly payment so you can compare your options rather than automatically assuming 20% is best.

FHA Loans Can Offer Lower Down Payment Options

FHA-insured mortgages are another option some buyers consider, particularly first-time buyers.

These loans may offer lower down payment requirements for eligible borrowers, although they also come with mortgage insurance and other requirements that should be considered when comparing financing options.

The important thing isn't simply finding the loan with the lowest down payment.

It's finding the financing option that makes the most sense for your overall financial situation.

VA Loans May Offer Eligible Buyers Another Option

Eligible veterans, active-duty service members, and certain surviving spouses may qualify for VA-backed financing.

One of the potential benefits of a VA loan is the ability for eligible borrowers to purchase with no down payment in qualifying circumstances.

That doesn't necessarily mean you'll need no money at all to purchase the home. Buyers still need to understand closing costs, prepaid expenses, inspections, and other costs associated with the transaction.

If you believe you may qualify for a VA loan, speaking with a lender experienced with VA financing can help you understand your eligibility and options.

Don't Forget About Closing Costs

Your down payment isn't the only amount you'll need to think about.

This is where buyers sometimes get caught off guard.

In addition to the down payment, there may be lender fees, title and settlement expenses, prepaid taxes and insurance, inspection costs, appraisal expenses, and other costs associated with purchasing the home.

That's why saving every dollar you have for the down payment isn't always the best strategy.

When you're looking at Richmond VA homes for sale, you want to understand your estimated total cash needed to close—not just the down payment.

Putting Less Down Can Help You Keep More Savings

There can be advantages to making a larger down payment, but there can also be reasons to keep some of your money in savings.

After closing, you'll still have expenses.

You may need furniture.

You may want to paint.

There could be moving expenses or utility deposits.

And eventually, every homeowner encounters maintenance and repairs.

Some buyers feel more comfortable putting less money down and maintaining a stronger emergency fund rather than using most of their savings to reach 20%.

The right decision depends on your finances and priorities.

A Lower Down Payment Can Affect Your Monthly Payment

While putting less money down may allow you to purchase sooner, it's important to understand the tradeoff.

A smaller down payment generally means you're borrowing more money.

Depending on your financing, you may also have mortgage insurance or other loan-related costs.

That can result in a higher monthly payment compared with making a larger down payment.

This is where comparing real numbers becomes extremely helpful.

Instead of asking, "What's the smallest down payment I can make?" consider asking, "Which down payment gives me a monthly payment I'm comfortable with while still leaving enough savings after closing?"

That's usually a much better question.

First-Time Buyer Programs May Be Worth Exploring

Depending on eligibility and availability, some buyers may also have access to programs designed to help with down payments or closing costs.

These programs can have income limits, purchase-price limits, location requirements, or other qualifications, so they're not automatically available to everyone.

Programs can also change over time.

A knowledgeable local lender can help you determine what may currently be available and whether you qualify.

Don't Wait to Talk to a Lender

One of the biggest mistakes buyers make is waiting until they have what they believe is the "perfect" amount saved before talking to anyone.

You don't have to wait.

Speaking with a lender doesn't mean you have to buy a house tomorrow. It simply gives you information.

You may discover you're already in a position to purchase, or you may learn that you need another six months to save, improve your credit, or reduce debt.

Either way, you'll have a plan instead of guessing.

A Richmond Realtor and a trusted mortgage professional can work together to help you understand what price range and financing strategy make sense before you start seriously touring homes.

Buying With Less Than 20% Down Can Be Possible

So, can you buy a home in Richmond with less than 20% down?

For many qualified buyers, the answer is yes.

The more important question is whether a lower down payment makes sense for your particular situation.

Your income, credit, existing debt, savings, loan program, monthly payment, and long-term goals all need to be considered together.

Khaliyah Heaven Barakhyahu and the Richmond VA real estate team at New Canaan Properties help buyers throughout Richmond and Central Virginia understand the home-buying process before they begin shopping. We work alongside lending professionals so buyers can understand their budget, financing options, and estimated cash needed before making an offer. Our goal is to help you make a decision based on your actual numbers rather than assumptions about what it takes to become a homeowner.

FAQs

Do I have to put 20% down to buy a home in Richmond, VA?

No. Depending on your qualifications and loan program, you may be able to purchase a home with considerably less than 20% down.

Can I get a conventional mortgage with less than 20% down?

Potentially, yes. Some conventional mortgage programs allow qualified borrowers to make smaller down payments, although private mortgage insurance may apply.

Can I buy a home with 3.5% down?

Certain FHA borrowers may qualify for a 3.5% minimum down payment, subject to current FHA requirements and lender approval. Your lender can determine whether you qualify.

Can I buy a home with no down payment?

Some eligible borrowers may qualify for zero-down financing through programs such as VA or USDA-backed loans, subject to program and property requirements.

Is it better to put 20% down?

Not necessarily. A larger down payment can reduce the amount you borrow and may lower certain monthly costs, but using most of your savings for a down payment may leave you with less money for emergencies and homeownership expenses.

Do I still need money for closing costs if I make a small down payment?

Usually, yes. Your down payment and closing costs are separate expenses, although certain assistance programs or negotiated seller contributions may help eligible buyers in some transactions.

Can a Richmond Realtor help me understand my down payment options?

A Richmond Realtor can help you understand the buying process and connect you with lending professionals who can explain the mortgage programs and down payment options available based on your financial situation.

A Local Perspective

Khaliyah Heaven Barakhyahu and the team at New Canaan Properties regularly speak with buyers who assume they're years away from purchasing because they haven't saved 20% down. Instead of guessing, we encourage buyers to learn what their actual options look like. Once you understand your estimated payment, cash needed at closing, and the financing programs you may qualify for, you can decide whether buying now makes sense or whether spending more time preparing is the better choice.

Khaliyah Heaven Barakhyahu
Real Estate Team Leader at New Canaan Properties
Based in Midlothian

Helping buyers and sellers across Richmond and Central Virginia with the support of a dedicated real estate team focused on clear guidance and results.

New Canaan Properties
804.312.3405