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Do You Really Need 20% Down to Buy a Home in Minnesota?Reading Time: 2 minutes

If you’ve been holding off on buying a home because you think you need a 20% down payment — you’re not alone. It’s one of the most common home buying myths we hear from Twin Cities buyers. But here’s the truth: you can buy a home with far less down than you think.

Let’s break down why this myth exists, how it impacts buyers, and what your real options are in today’s market.


The 20% Down Payment Rule Is a Myth

The idea that you must have 20% down stems from outdated lending standards. In reality, most first-time buyers — and even many repeat buyers — put down significantly less.
 

According to the National Association of Realtors, the average down payment for first-time buyers is just 6 – 7%. Many local Minnesota buyers qualify for loans with as little as 3% down — sometimes even less. 

Low Down Payment Loan Options for Twin Cities Buyers

Here are just a few of the programs available to buyers right now:
  • FHA Loans – Backed by the Federal Housing Administration, these allow for as little as 3.5% down. Great for buyers with lower credit scores.
  • Conventional 97 Loans – A conventional loan option that lets qualified buyers put down just 3%.
  • VA Loans – Available to eligible veterans and active-duty service members, offering 0% down with no PMI.
  • USDA Loans – For rural and suburban buyers, these offer 0% down if the property and buyer meet eligibility.
 
Want to explore what you qualify for? Start with a free homebuyer consultation here.

What If You Don’t Have 20%? You Still Have Options.

You might pay private mortgage insurance (PMI) if you put down less than 20%, but that doesn’t mean it’s a bad idea. PMI is often temporary and can be removed later. More importantly, waiting years to save 20% could cost you tens of thousands in missed equity growth.

  • Get into the market sooner
  • Start building equity now instead of waiting
  • Keep cash on hand for repairs, upgrades, or emergencies
 

Don’t Let This Myth Delay Your Goals

At Kerby & Cristina Real Estate Experts, we help Minnesota buyers understand their full range of financing options—and match them with lenders who can help them move forward confidently.

Our advice? Don’t wait on the sidelines because of outdated assumptions. The longer you wait, the more home prices and interest rates may rise.

Ready to explore your buying power — even with less than 20% down? Let’s talk. Our expert agents are here to guide you every step of the way.