For many first-time homebuyers, the path to homeownership feels overwhelming — and unfortunately, it’s often filled with misinformation. From the idea that you must have 20% down, to confusion about credit score requirements, to uncertainty about down payment assistance programs, these myths keep too many people renting longer than they need to.
In this episode of the State 48 Homeowner Podcast, Scott Kooiman talks with Steve Farrington and Twila Edwards from the Klaus Team to break down the facts and help Arizona buyers take their first steps with confidence.
Do You Really Need 20% Down to Buy a House?
One of the most common myths is that every buyer needs 20% down. While a larger down payment can reduce your monthly payment and help avoid private mortgage insurance (PMI), it’s not required for most loan programs.
- FHA Loans: As little as 3.5% down
- Conventional Loans: 3%–5% down for qualified first-time buyers
- VA Loans: 0% down for eligible veterans, active duty military, and spouses
- USDA Loans: 0% down for eligible buyers in designated rural areas
The reality: Most buyers do not need to wait until they save 20%.
What Credit Score Do You Need to Buy a Home?
Credit scores play a major role in mortgage approval, but the requirements are often lower than most buyers assume.
- FHA Loans: Minimum 580 FICO (with 3.5% down)
- VA Loans: No official minimum credit score requirement
- Conventional Loans: Higher scores (typically 620+) get better rates and lower PMI
Improving your score can make a big difference in loan options and interest rates. Strategies include keeping credit card utilization under 30%, making payments on time, and avoiding new credit inquiries before applying.
Down Payment Assistance Programs in Arizona
Many buyers are surprised to learn that Arizona offers a variety of down payment assistance programs. These programs can provide grants, forgivable second loans, or silent seconds to cover some or all of the required down payment.
Examples include:
- State and city-level bond and grant programs
- Employer-assisted housing funds
- Specialized programs for first responders, teachers, and healthcare workers
While some assistance programs come with slightly higher interest rates, they can make the difference between renting and owning — and for many buyers, the long-term benefits of homeownership outweigh the short-term costs.
Busting the Myths and Taking the First Step
Don’t let myths about down payments and credit scores hold you back. The key is talking with experienced real estate professionals and lenders who understand the options available and can guide you to the program that fits your needs.
At the Klaus Team, we’ve helped countless Arizona families move from renting to owning by dispelling these myths and building smart strategies.
Conclusion
The journey to homeownership starts with the right information. You don’t need 20% down, you may already qualify with your credit score, and down payment assistance programs could help you take the leap sooner than you thought.
Listen to Episode 194 of the State 48 Homeowner Podcast for the full conversation, or start your homeownership journey today at KlausTeam.com/firststeps.
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The post Ep 194 – Homebuyer Myths Busted: Down Payments, Credit Scores, and Assistance Programs first appeared on State 48 Homeowner.
