There is nothing quite like homeownership. You have a chance to buy a place you love, decorate it as you please, and also make an investment into your financial future. But if you’ve ever looked into buying a home, you have probably heard experts saying that you need at least 20% of the value of the home in cash for a down payment.

With most homes valued at $300,000 or more, that means that you need at least $60,000 (and often more than $100,000) to give as a down payment.

Yet few people have $60,000. Even fewer have $60,000 that they can comfortably put down to purchase their home without worrying about their financial health. So how can you buy a home if you don’t have the 20% down payment?

Options for Low Down Payment Home Purchasing

There is some great news for homeowners. The 20% down payment requirement only applies to Conventional loans and is only to get a home without requiring “Private Mortgage Insurance,” which is a mandatory insurance that lenders require when you have less than 20% equity in the home.

It can be a good financial decision to make a 20% down payment if you have the finances. But rest assured, there are many other options. For example:

• FHA Loans – FHA Loans, which are loans backed by the Federal Housing Administration, allow homebuyers to get loans with only a 3.5% down payment, provided the borrower receives a 30-year fixed-rate mortgage. There is a maximum amount to each mortgage set by the county the home is in, but FHA mortgages open the door for a fraction of the down payment.
• Conventional Lending – Even without an FHA-backed loan, you can still get a home with a low down payment. You can get a conventional loan up to $412,000 with only a 5% down payment, and you can get a loan over $412,000 with a 10% down payment.
• VA Loans – For veterans, you may qualify for a VA loan. VA Loans are one of the few mortgage loans that you can take with no down payment. Only US military veterans, reservists, members of the National Guard, and active members of the military qualify for VA loans, and there are some requirements for the loan that must be met, but this can be an excellent option.
• USDA Loans – Like VA loans, USDA loans allow individuals to buy home with no money down. However, these mortgages are only available for low-income buyers in rural areas and do not apply to most forms of home loans.

If the 3.5%, 5%, or 10% down payments are an issue, sometimes the money in retirement accounts, equity, and other investments may be able to go toward a home.