Many first-time buyers in Wellington, Royal Palm Beach, or Lake Worth often ask the same question: Do I really need 20% down to buy a home? The short answer: absolutely not.
In fact, a recent client of mine thought homeownership was out of reach because he didn’t have a $100K nest egg saved. What he didn’t know was that programs like FHA loans and Florida’s Hometown Heroes program could get him into a home with as little as 3.5% down and thousands in grant money. Today, he’s settled into a beautiful Wellington townhome—with monthly payments lower than what he was paying in rent.
If you’re holding off on buying because of the 20% myth, this guide will break it down for you—Wellington-style. We’ll cover the truth behind the 20% rule, show you local programs that make homeownership possible with far less, and link you directly to resources so you can take the next step with confidence.
Why the 20% Rule Is Still Hanging Around
The idea of needing 20% down to buy a home goes back decades. It originated as a way for lenders to minimize risk. With a large down payment, borrowers were seen as less likely to default. Plus, putting down 20% helps buyers avoid private mortgage insurance (PMI)—an extra monthly cost.
But here in Palm Beach County, especially in competitive markets like Wellington, this idea can hold buyers back unnecessarily. Homes are appreciating quickly. Waiting years to save 20% could cost you more in rising prices than you’d save in PMI.
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Loan Options That Require Less Than 20%
It’s a common misconception that you need to save 20% before getting serious about buying a home. In reality, there are several loan programs designed specifically to help buyers get into a home sooner, with far less cash out of pocket. Whether you’re a first-time buyer in Wellington or upgrading to a new property in Royal Palm Beach, here are four popular loan types that require less than 20% down:
- FHA Loans – Backed by the Federal Housing Administration, these loans only require 3.5% down. They’re ideal for first-time buyers or anyone with less-than-perfect credit. FHA also allows for more flexibility with debt-to-income ratios and offers competitive interest rates.
- Conventional 97 Loans – A conventional option that allows you to put just 3% down, available through Fannie Mae or Freddie Mac. These loans are great for buyers with solid credit who may not want to go the FHA route. With mortgage insurance that can eventually be removed, they’re a smart long-term option for financially stable borrowers.
- VA Loans – Designed for active-duty military, veterans, and eligible spouses, these loans require 0% down and no PMI. They also often come with lower interest rates and more lenient credit requirements. A VA loan is one of the best tools for qualifying service members buying in Palm Beach County.
- USDA Loans – Available in select areas just outside Wellington, these 0% down loans are designed for rural and suburban homebuyers. They come with income limits and property eligibility requirements, but offer low interest rates and reduced mortgage insurance costs.
These programs not only help make homeownership more accessible—they also free up funds for moving, furnishing, or saving for repairs.
➡️ Find out if you qualify for low-down-payment programs
Florida Hometown Heroes Program (Local Highlight)
If you’re a teacher, nurse, first responder, or work in nearly any public-serving role, you may qualify for up to $35,000 in down payment and closing cost assistance through Florida’s Hometown Heroes program. In 2024 alone, the program provided over $100 million in assistance, helping more than 6,100 families purchase homes across 63 Florida counties.
To qualify:
- You must be employed full-time by a Florida-based employer in an eligible occupation (healthcare, education, first responder, public safety, etc.)
- The property must be your primary residence
- You may use FHA, VA, RD, or conventional loans
- Assistance comes in the form of a 30-year, 0% interest deferred second mortgage (repayable only if you sell, refinance, or move out)
The average assistance provided was over $16,000, with an average loan size of $321,000.
➡️ Learn more about the Hometown Heroes program
What Happens If You Put Less Than 20% Down?
It’s important to understand the trade-offs:
- PMI Costs – You’ll likely pay PMI, but it may only be $75–$150/month depending on credit and loan size
- Higher Monthly Mortgage – Smaller down payment means a slightly larger loan amount
- More Liquidity – You keep more cash for moving, furniture, or reserves
But in high-appreciation areas like Wellington, the flexibility of buying now often outweighs the small added costs.
➡️ Start your pre-approval process
Real Talk: What Should You Put Down?
There’s no one-size-fits-all answer. If you have the 20% saved, great—you’ll avoid PMI and get better terms. But if saving that much delays your goals, it may be smarter to put 3%–10% down, buy now, and refinance later.
That’s exactly what many of our clients are doing—especially those investing through our investor subsite or purchasing Airbnb-ready homes.
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Final Thoughts
You don’t need 20% down to buy a home in Wellington. Whether you’re buying your first home in Greenacres, upgrading in Royal Palm, or investing in Lake Worth, you have real options.
Programs like FHA, VA, and Hometown Heroes make it possible—today. And as local prices rise, waiting to save more could cost you much more than PMI.
➡️ Contact me to run your numbers or get started through our smart buyer intake form. I’ll help you figure out what’s possible now—not five years from now.
