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The 20% myth
Somewhere along the way, "20% down" became gospel. It isn't. Twenty percent is simply the point where you avoid mortgage insurance on a conventional loan — it was never a requirement to buy. Waiting to save 20% in a high-priced market like California can cost you years of equity and rising prices.
Reality: Most first-time buyers put down far less than 20% — and many use assistance programs to lower it even further.
Minimums by loan program
Your minimum down payment depends on the loan program you qualify for:
| Program | Typical minimum down | Good for |
|---|---|---|
| Conventional | 3% | Buyers with solid credit |
| FHA | 3.5% | Lower credit / first-time buyers |
| VA | 0% | Eligible veterans & service members |
| USDA | 0% | Eligible rural/suburban areas |
What PMI is (and the trade-off)
When you put less than 20% down on a conventional loan, lenders add PMI (private mortgage insurance) to your payment. It protects the lender, not you — but it's what lets you buy sooner with less cash.
- It's usually temporary. On conventional loans, PMI can typically be removed once you reach about 20% equity.
- FHA is different. FHA loans carry their own mortgage insurance with different rules.
- The math often favors buying. A modest PMI cost can be far cheaper than years of rising rents and home prices.
Down-payment assistance
California offers programs (such as CalHFA) designed to help with down payment and closing costs. Depending on your income, county, and the property, assistance can shrink your out-of-pocket cost dramatically. Gift funds from family are also allowed on many programs, documented with a simple gift letter.
Worth checking: Many buyers assume they don't qualify for help — and are wrong. Ask Orange to see what you may be eligible for.
So how much should you put down?
Minimum isn't always best, and neither is emptying your savings. A larger down payment lowers your monthly payment and can remove PMI — but keeping cash in reserve for closing costs, moving, and emergencies matters too. The right number is the one that gives you a comfortable payment and a healthy cushion.
Try the payment calculator to see how different down payments change your monthly number, then ask Orange to build a plan around your budget. New to all this? Start with our first-time buyer guide.
