Last updated: July 2026
Quick answer: You do not automatically need 20% down to buy a home. The appropriate down payment for a Long Island home depends on the mortgage program, your credit and income, the property, and how much cash you want to keep after closing.
Some qualified buyers use low-down-payment conventional or FHA financing, while eligible VA and USDA borrowers may have no-down-payment options. Approval and final terms always depend on the lender and program rules.
A down payment is the portion of the purchase price you pay upfront. It affects the size of your mortgage, monthly payment, mortgage insurance, cash reserves, and sometimes the strength of your offer. The goal is not simply to put down as much as possible. It is to choose an amount that supports the purchase without leaving you financially stretched after closing.
1. Do You Need 20% Down?
No. Twenty percent is a useful benchmark, not a universal requirement. A 20% down payment on a conventional mortgage may help you avoid private mortgage insurance and reduce the amount borrowed. But waiting until you reach 20% can also delay a move while home prices, interest rates, rent, and personal circumstances change.
The better question is: Which loan options fit your finances, and what will each option cost upfront and monthly? Ask a qualified lender to compare scenarios using the same purchase price so you can see the effect of different down payments.
2. Common Low-Down-Payment Options
Conventional mortgages
Some conventional programs allow qualified buyers to purchase with less than 20% down. Mortgage insurance is commonly required when the down payment is below 20%, and the cost depends on factors such as credit, loan-to-value ratio, and program terms.
FHA-insured mortgages
FHA financing may allow a minimum required investment of 3.5% for eligible borrowers and properties. FHA loans include mortgage insurance and other rules, so compare the full payment and long-term cost—not just the minimum down payment. Review the current facts on the U.S. Department of Housing and Urban Development website.
VA-backed mortgages
Eligible veterans, service members, and certain surviving spouses may be able to use a VA-backed purchase loan with no down payment when the sales price does not exceed the appraised value. VA and lender eligibility standards still apply, and a funding fee may apply. See the official VA purchase-loan guidance.
USDA loan guarantees
Eligible buyers and properties in qualifying areas may have access to USDA financing with no down payment. Location, household income, occupancy, and lender requirements apply. Not every Long Island property qualifies, so confirm the address and program rules with an approved lender.
3. Do Not Forget Closing Costs and Cash Reserves
Your down payment is only part of the cash needed. Buyers may also need funds for lender charges, an appraisal, inspection, attorney, title-related expenses, prepaid property taxes and insurance, moving, and immediate repairs or furnishings. The exact list varies by transaction and loan.
The Consumer Financial Protection Bureau explains that the Closing Disclosure separates closing costs from cash to close. Review both your Loan Estimate and Closing Disclosure carefully.
On Long Island, property taxes can materially affect the monthly payment and the funds collected at closing. Evaluate principal, interest, taxes, homeowners insurance, mortgage insurance, and any condo, co-op, or homeowners association charges together.
4. Down Payment Assistance in New York
Qualified New York buyers may be able to use a State of New York Mortgage Agency program. SONYMA offers mortgages and a Down Payment Assistance Loan that may help with a down payment, closing costs, or mortgage insurance. Income, purchase-price, occupancy, property, lender, and program requirements apply, and some assistance can be subject to repayment if the home is sold or refinanced during the recapture period.
Because programs and funding can change, use the official SONYMA website and a participating lender to confirm current eligibility and terms.
5. How To Choose the Right Amount
Compare complete loan scenarios
Ask lenders to show the interest rate, annual percentage rate, monthly mortgage insurance, total monthly payment, lender fees, and cash to close for each down-payment option. The CFPB recommends comparing offers from multiple lenders rather than relying on one quote.
Protect your emergency cushion
Consider what remains after the closing—not only what you can bring to it. A reserve for repairs, moving, job changes, and ordinary life can be more valuable than using every available dollar to reduce the loan.
Match the plan to the property
Single-family homes, multifamily properties, condos, and co-ops can have different financing and approval considerations. Confirm that both you and the property qualify before making assumptions about the minimum down payment.
Frequently Asked Questions
Is 20% down always the best choice?
No. It can lower the loan amount and may eliminate conventional private mortgage insurance, but it can also reduce the cash you keep for closing costs, repairs, and emergencies. Compare the entire financial picture.
Can gift funds be used?
Many mortgage programs allow eligible gift funds from approved donors when properly documented. The rules vary, so discuss the source and timing with the lender before money changes hands.
How early should I speak with a lender?
Ideally, before actively touring homes. An early review can reveal loan choices, credit issues, documentation needs, and a realistic cash-to-close range while there is still time to prepare.
Plan Your Long Island Purchase
The right down payment for a Long Island home is the one that works with your loan, monthly budget, closing costs, and life after the move. I can help you connect the financing numbers to current Nassau and Suffolk County home choices so you shop in a range that makes sense.
Contact Glen Hagen to plan your Long Island home search.
This article is for general educational purposes and is not lending, legal, tax, or financial advice. Mortgage programs, eligibility, rates, and assistance terms can change. Consult appropriately licensed professionals about your situation.