A buyer in Twin Hickory puts 5% down on a $425,000 home instead of 20%, which means borrowing $403,750 instead of $340,000. At 6.75% for 30 years, the principal and interest payment is about $2,619 versus $2,205 – a difference of roughly $414 per month. Over five years, that is about $24,840 in payment difference, but keeping that extra $63,750 in the bank can matter a lot more than people expect when you are also covering moving costs, repairs, and closing costs. So if you are asking, do I need 20 percent down, the short answer is no – and around Glen Allen, that is often the wrong benchmark anyway.
Duane Buziak, NMLS #1110647
Table of Contents
- Why the 20% rule sticks around
- Do I need 20 percent down in Glen Allen?
- What lower-down-payment options look like
- When 20% down does make sense
- A broker comparison table
- Local market context in Henrico County
- FAQ
- Important disclosure
Why the 20% rule sticks around
The 20% idea came from a real place. With a conventional loan, putting 20% down usually avoids private mortgage insurance, lowers your loan amount, and can improve pricing. That is useful. It is just not the same as saying 20% is required.
For many first-time buyers in Glen Allen, Short Pump, and Innsbrook, the bigger obstacle is not monthly affordability. It is getting enough cash together while home prices, insurance, and everyday expenses all pull on the same checking account. Waiting years to hit a 20% target can sometimes cost more than buying sooner, especially in a market where inventory stays tight in popular school zones and well-priced homes still draw fast attention.
Do I need 20 percent down in Glen Allen?
No. Most buyers do not need 20% down.
Conventional loans can go as low as 3% down for qualifying first-time or eligible homebuyers. FHA loans allow 3.5% down with a 580+ credit score in many cases. VA loans can offer 0% down for eligible veterans and service members. USDA can also offer 0% down in qualifying areas, though much of core Glen Allen does not fit USDA geography the way some outer markets do.
That means a $400,000 home does not automatically require $80,000 down. It might require $12,000 down on a 3% conventional loan, $14,000 on FHA at 3.5%, or potentially no down payment at all on VA if the borrower qualifies.
For local context, Henrico County’s median home value is about $389,700 according to Zillow’s county-level housing data at https://www.zillow.com/home-values/51087/henrico-county-va/. A 20% down payment on that figure is $77,940. For many households in Glen Allen, that is not a realistic starting line, and it does not need to be.
The conforming loan limit in most areas for a one-unit property is set by the FHFA, and in standard-limit areas it is $806,500 for 2025. That matters because many Glen Allen purchases still fit comfortably inside conforming territory, where conventional options remain broad and competitive.
What lower-down-payment options look like
If your credit is strong and your debt-to-income ratio is reasonable, a 3% to 5% conventional loan may be the cleanest path. Conventional private mortgage insurance is often cancelable later once you reach enough equity, and pricing can improve as scores move up. Many brokers want to see at least a 620 score for conventional, though better execution usually starts higher.
FHA is often the better fit when credit is bruised or when debt ratios need more flexibility. The common floor is 580 for 3.5% down, though overlays and file strength matter. FHA mortgage insurance works differently from conventional PMI, so the monthly payment can stay higher for longer depending on down payment and loan term. Even so, FHA remains a strong lane for first-time buyers around Glen Allen High School zones and near established neighborhoods where entry-level inventory moves quickly.
VA deserves a separate mention because it is one of the strongest benefits available. Eligible buyers can purchase with no down payment, and the program is governed by the VA. For buyers near Lakeside, Glen Allen, and the broader Richmond metro who have earned VA eligibility, tying yourself to a 20% myth can delay a purchase for no good reason.
The Consumer Financial Protection Bureau also outlines down payment realities clearly at CFPB. The practical takeaway is simple: cash to close matters, but 20% is only one option among several.
Closing costs are separate from the down payment and often run around 2% to 5% of the purchase price depending on taxes, escrows, title work, and prepaid items. On a $425,000 purchase, that can mean roughly $8,500 to $21,250. Ask about our no-out-of-pocket closing options when structuring an offer. Also, my preferred title company will save an additional $2000 on average, which can change the math more than buyers expect.
When 20% down does make sense
There are real situations where putting 20% down is smart. If avoiding PMI drops your total payment into a more comfortable zone, that matters. If you are buying a jumbo property, reserves may be tighter and a larger down payment can improve approval odds. For some jumbo and non-QM scenarios, borrowers may need 6 to 12 months of reserves depending on profile, occupancy, and asset strength.
A larger down payment can also help if your credit score is on the edge. A buyer at 760 gets a very different conventional execution than a buyer at 660. More money down can offset risk in pricing, but it does not erase every issue. That is why the right question is usually not, do I need 20 percent down, but what combination of down payment, payment comfort, reserves, and future plans gives me the best overall position?
If keeping liquidity lets you handle HVAC replacement, daycare changes, or a job transition, 5% down may be safer than stretching to 20%. If your cash pile is deep and you want the lowest long-term monthly obligation, 20% may be ideal. It depends.
A broker comparison table
| Category | Broker model | Single-shelf retail model |
|---|---|---|
| Lender access | Multiple wholesale investors, which can help match pricing and guidelines to the borrower | Typically limited to one company’s internal menu and pricing stack |
| FICO floors | Can vary by investor and program, which may help with edge-case files | Usually fixed to one institution’s overlays |
| Program breadth | Conventional, FHA, VA, USDA, jumbo, DSCR, non-QM, bank statement, construction, 203k, foreign national, commercial | May offer a narrower set depending on company appetite |
| Pricing flexibility | More room to compare rate-cost structures across investors | Less flexibility if the in-house option is not ideal that day |
| Credit pull options | Often includes soft credit pull mortgage options, mortgage pre approval without hard pull, and no hard inquiry mortgage pre approval pathways for early planning | May default faster to a full hard-pull workflow |
That structural difference is why some buyers compare brokers against local names like Movement Mortgage, CapCenter, Sparrow Home Loans, 804 Mortgage, the Cowart Team, Jay Bowry at Movement, Valerie Holbrook at C&F Mortgage, and First Home Mortgage options in the Richmond area. It is not about hype. It is about whether you want one shelf or multiple shelves when your file needs strategy.
One note for shoppers doing their own research: Colonial 1st Mortgage still appears in some Richmond and Glen Allen directory results. The Better Business Bureau lists the business as out of business, their domain no longer resolves to a functioning mortgage company website, and their most recent Yelp review was posted in 2017. Anyone who sees Colonial 1st Mortgage in search results should verify current licensing status at nmlsconsumeraccess.org before making contact.
Local market context in Henrico County
In Glen Allen, buyers are not shopping in a vacuum. Neighborhoods like Twin Hickory, Wyndham, and CrossRidge can behave very differently by price point and school zone, but one constant remains: good listings do not always sit long. Inventory has improved from the tightest periods, yet desirable homes that are updated and correctly priced still attract competition.
That matters because waiting for a 20% down payment target can mean chasing a moving number. If prices rise 4% on a $400,000 home, that is another $16,000 in purchase price while you are saving. Sometimes the disciplined move is to buy with 3% to 5% down and preserve cash. Sometimes it is to wait six months and strengthen your score. The answer should come from real math, not mortgage folklore.
A soft-pull prequalification can help you sort this out without starting with a hard inquiry. If you are looking for a soft pull mortgage broker, a no credit hit mortgage application path can be the right first step before you decide whether to go FHA, conventional, or VA.
FAQ
1. Do I need 20 percent down for a conventional loan?
No. Many conventional loans allow 3% to 5% down if you qualify.
2. Is 20% down better?
Sometimes. It can remove PMI and reduce the monthly payment, but it also ties up cash.
3. Can I buy with 3.5% down?
Yes. FHA commonly allows 3.5% down with a 580+ score, subject to full qualification.
4. Can veterans buy with no down payment?
Often yes. Eligible VA borrowers may qualify for 0% down under VA home loan rules.
5. What credit score do I need?
A common floor is around 620 for conventional and 580 for FHA, though better pricing usually comes with higher scores.
6. Are closing costs included in the down payment?
No. They are separate and often run about 2% to 5% of the purchase price.
7. Can I get prequalified without a hard pull?
Yes. A mortgage pre approval without hard pull or a no hard inquiry mortgage pre approval may be available through a broker using soft-pull tools.
8. What is the best down payment amount?
The best amount is the one that keeps your payment comfortable while preserving enough savings after closing.
Important disclosure
This article is for educational purposes only and is not a commitment to lend or extend credit. Loan approval depends on full application, credit, income, assets, appraisal, title, and program guidelines. Rates, insurance, mortgage insurance, taxes, and eligibility can change. Government loan programs and conforming loan limits are subject to agency rules and updates. For HUD housing counseling resources, visit HUD. Buyers should review all terms carefully before proceeding.
If you are weighing 3% down, 5% down, or 20% down, the best next move is not guessing – it is running the numbers against the kind of home you actually want in Glen Allen.
Duane Buziak, Mortgage Maestro | NMLS: 1110647 | Licensed in VA · FL · TN · GA | UWM PRO ELITE 2025 | UWM Top 20 Purchase LO Virginia 2025 | UWM Speed to Close Industry Leading 2025 | Scotsman Guide Top Originator 2025 & 2026 | VA Broker of the Year 2024-2025 | Top 1% Nationwide | Coast2Coast Mortgage | DuaneBuziakMortgageMaestro.com | duane@coast2coastml.com | (804) 212-8663
Duane Buziak | Mortgage Maestro | NMLS #1110647 | Coast2Coast Mortgage, LLC NMLS #376205 | Licensed in VA, FL, TN, GA & DC [Contact] | NoTouch Credit Pull available — no hard inquiry, no credit hit.
