There are numerous options for closing the financial gap and getting yourself into a house sooner than you think.
First-time homebuyer loans
USDA loans accept lower credit scores than conventional loans and come with fixed interest rates, so your mortgage payment will never increase. These loans never require a down payment.
This U.S. Department of Agriculture program requires that the home be in a rural area. But you get a lot of leeway on the definition of "rural" — many suburban areas count, too.
FHA, Fannie Mae and Freddie Mac mortgages
These loans — backed by the Federal Housing Administration and government-sponsored mortgage companies Fannie Mae and Freddie Mac — allow for down payments as low as 3% of the home's purchase price.
Fannie Mae and Freddie Mac FHA loans also require first-time homebuyers to go through an education program, which addresses the fear of the unknown that many newbies face.
VA loans are among the many benefits of serving in the armed forces. These loans insured by the Department of Veterans Affairs are 100% financed, which means no down payment is needed.
Plus, some lenders are willing to offer these loans even if your credit is only fair or if you have had a bankruptcy in your past.
Other potential government grants for first-time homebuyers
Eco-friendly buyers are perfect for the government's energy-efficient mortgages, offered through either the FHA and VA programs.
The costs of giving your home "green" upgrades can be included in the loan but are not factored into the amount the down payment is based on. The buyer gets a green home, a larger loan and a cheaper down payment.
Good Neighbor Next Door
The Good Neighbor Next Door program gives special financing to everyday heroes like teachers, paramedics, firefighters and police offices working for the betterment of their communities.
Eligible applicants can get a house at half price if they buy in a neighborhood that is considered in need of "revitalization" by federal government standards and agree to stay in the home for three years.
State and local programs
Some cities sponsor down payment assistance programs and first homebuyer grants to new potential homeowners. You read that right: You can get some cash to put toward that big pile of money you're expected to have at closing.
Or, your state or city may offer low-interest loans to provide down payment help. It benefits the local economy for people to purchase homes, so state and local governments offer support.
Still unsure? Ask a pro
Two types of professionals can help you navigate this process. Mortgage loan officers help buyers find the best loan, and real estate agents advocate for the buyer in negotiation.
Both are paid commission based on the sale of the home, so these services don't require any upfront cost for the buyer.
If homeownership is your goal, you don't have to wait until you can afford a down payment. You have plenty of resources.