Do I Really Need 20% Down to Buy a Home in Savannah?

For many people dreaming of owning a home in Savannah or anywhere in Coastal Georgia, one big question keeps coming up: Do I really need to save 20 percent for a down payment?

For decades, the “20 percent rule” has been repeated at family gatherings, passed down from parents, or advised by well-meaning friends. It is the number that has been treated like a golden standard in real estate. But here’s the truth: while 20 percent has benefits, it is not the only path to buying a home, and for many buyers in Savannah today, it is not even the most realistic option.

In this guide, we are going to break down what the 20 percent myth really means, why it has stuck around for so long, and the other options available to buyers who want to purchase a home with less money down. We will also cover the pros and cons of going with a smaller down payment, what local assistance is available in Savannah and surrounding areas, and how the Heather Murphy Group can help you decide on the down payment strategy that fits your life best.

Why 20 Percent Became the Standard

The idea that you need 20 percent down did not appear out of thin air. It became popular for two main reasons.

First, when you put down 20 percent on a conventional loan, you avoid private mortgage insurance (PMI). PMI is an extra monthly cost added to your payment when you put down less than 20 percent, designed to protect the lender. Buyers wanted to avoid that added cost, so 20 percent became the safe number.

Second, lenders historically liked 20 percent because it gave them a cushion. The larger the down payment, the less risk for the bank. In return, buyers often received lower interest rates and stronger negotiating power.

Over time, that standard stuck, even though new loan products, federal programs, and local initiatives have made buying a home with far less money down completely possible.

Newly built single-family home in Pooler GA with landscaped yard

The Reality: You Can Buy a Home in Savannah with Much Less

FHA Loans – 3.5 Percent Down

One of the most common loan programs for first time buyers is the FHA loan. Backed by the Federal Housing Administration, FHA loans allow qualified buyers to purchase a home with as little as 3.5 percent down. This opens the door for buyers who might not have years to save for a huge down payment.

The tradeoff is that FHA loans require mortgage insurance, and the property must meet certain appraisal standards. Still, for many Savannah buyers, FHA loans make homeownership possible much sooner.

VA Loans – 0 Percent Down

If you are a veteran, active duty service member, or qualifying spouse, VA loans are one of the most powerful tools available. With no down payment required and no PMI, VA loans allow buyers to purchase without the long wait of saving tens of thousands of dollars. Savannah has a strong military presence, and this loan option makes it easier for service members and their families to put down roots in the community.

USDA Loans – 0 Percent Down

Savannah and its surrounding rural areas include regions where USDA loans may apply. These government-backed loans allow eligible buyers to purchase with no money down if the property is located in a qualifying area and the buyer meets certain income limits. For homes outside the city center, this can be an excellent choice.

Conventional Loans – 3 to 5 Percent Down

Many conventional lenders now offer programs that allow first time buyers to purchase with as little as 3 to 5 percent down. These programs often come with PMI, but it is temporary. Once you reach 20 percent equity in your home, the PMI can usually be removed.

Local Assistance Programs in Savannah

In addition to national loan programs, buyers in Savannah have access to local assistance programs that can help with down payment and closing costs. These programs are designed to make homeownership more affordable and accessible for first time buyers.

  • Savannah’s Dream Maker program provides down payment assistance for qualifying buyers purchasing within the city limits.

  • Georgia state programs can also assist buyers with affordable financing and deferred loans to offset upfront costs.

These programs change over time, but our team can walk you through which ones you may qualify for and how they could help you reduce the cash you need to bring to the table.

Close-up of a mortgage calculator comparing 20%, 5%, and 3.5% down payment amounts

Pros and Cons of Saving 20 Percent

Benefits of 20 Percent or More

  • You avoid PMI, which means a smaller monthly payment.

  • You immediately start with more equity in your home.

  • Lenders may offer better interest rates when you bring a larger down payment.

  • Sellers may see you as a stronger, more reliable buyer.

Drawbacks of Waiting for 20 Percent

  • It takes longer to save, and in the meantime, home prices may continue to rise in Savannah and Coastal Georgia. Waiting could actually cost you more.

  • Money tied up in a down payment is money you cannot use for savings, investments, or emergencies.

  • Life circumstances change. If you keep delaying for a bigger down payment, you might miss the window when homeownership would fit best with your lifestyle.

The key takeaway is this: while 20 percent down is helpful, it should not be the only factor stopping you from buying a home.

What a Smaller Down Payment Looks Like in Savannah

Let’s use a practical example. Suppose you are looking at a home in Pooler priced at $350,000.

  • 20 percent down would be $70,000.

  • 5 percent down would be $17,500.

  • 3.5 percent down with an FHA loan would be $12,250.

  • 0 percent down with a VA or USDA loan would mean no down payment at all.

The difference between saving $70,000 and $12,000 could be the difference between waiting years and buying this year.

How to Decide What Works for You

Every buyer’s situation is unique. Here are a few guiding questions:

  • What is your comfort level with monthly payments? Lower down means a higher payment.

  • How long do you plan to stay in the home? If only a few years, you may not benefit from waiting to save more.

  • Do you qualify for special programs? If you are military, a veteran, or purchasing in a USDA zone, you may be eligible for zero down options.

  • How strong is your savings cushion? Do not drain all your reserves just to hit 20 percent. Emergency savings and cash for repairs are equally important.

How Heather Murphy Group Helps Buyers

At Heather Murphy Group, we know that buying a home is about more than numbers. It is about confidence and clarity. Our team of experienced agents works hand in hand with trusted local lenders to help you:

  • Compare loan programs side by side.

  • Understand exactly how much you need to bring to closing.

  • Explore local down payment assistance programs.

  • Create a strategy that fits your lifestyle and budget.

  • Negotiate with confidence knowing you are not at a disadvantage for putting down less than 20 percent.

We have helped families across Savannah, Pooler, Richmond Hill, and the entire Coastal Georgia area purchase homes with 20 percent down, 5 percent down, and everything in between. The right number is the one that works for you.

Heather Murphy Real Estate Group - Buyer Specialists

Final Thoughts

So, do you really need 20 percent down to buy a home in Savannah? No. While 20 percent comes with benefits, it is not a requirement. With FHA, VA, USDA, conventional low down programs, and local assistance, there are multiple ways to step into homeownership without waiting years to save.

The key is to work with professionals who can guide you through the options, explain the trade-offs, and help you find the smartest path forward.