Helping Family with A Downpayment For Their Dream Home

Consumers across income and education brackets would greatly benefit from increased awareness and financial understanding on downpayment requirements needed to obtain a mortgage. In NAR’s September Housing Opportunities and Market experience (HOME) report, a quarterly index measuring consumer sentiment on the housing market, respondents were asked topical questions regarding downpayments. The report found that 14 percent of respondents believe they need less than 10 percent for a mortgage downpayment. Thirty-four percent believe that need more than 20 percent for a downpayment.



For those that currently own a home, 35 percent—the largest share—believe they need 15 to 20 percent for a downpayment, and 13 percent believe they need five percent or less—the smallest share. For respondents 34 years and younger, 37 percent believe they need more than 20 percent, as did 43 percent of those 65 years or older. Four in 10 people with an income of less than $50,000 believe they need more than 20 percent as do nearly half of respondents with no college education.

The September survey also asked if respondents whether they helped out a family member with a downpayment and if they received downpayment assistance from family. For all respondents, only 16 percent had helped out a child or family member with a downpayment. Respondents from rural areas (19 percent) were more likely to help a child or family member with a downpayment than in urban areas (14 percent). Respondents with an income of over $100,000 (19 percent) were also more likely to help a family member than those that make less than $50,000 (14 percent). Respondents that own a home (20 percent) are twice as likely to help out a family member with a downpayment as those that rent (nine percent) or live with someone else (10 percent). Respondents that offered downpayment assistance increased with age.

For all respondents, 19 percent have received a downpayment from a parent or family member. Twenty-two percent of those that make $50,000 to $100,000 received assistance with a downpayment from a parent or family member—the largest share by income group. Thirty-four percent of respondents 34 years or younger have also received downpayment assistance from family—the largest share among age group. Urban areas and the Northeast region received the greatest share of downpayment assistance as did those with some college education.


For more information on mortgage eligibility and downpayment requirements to purchase a home, please see the Buying a Home portal by the U.S. Department of Housing and Urban Development (HUD) and the Local Homebuying Programs by state.