Busting the 20% Down Payment Myth in Des Moines: Your Path to Homeownership

by Peter Jones

Hey there, future homeowner! If you’ve been holding off on buying a house because you think you need a 20% down payment, it’s time to bust that myth wide open—especially here in Des Moines.

The 20% Down Payment: More Fiction Than Fact

Let’s get real: the idea that you must put down 20% to buy a home is outdated. Many buyers, especially first-timers, are securing homes with much less. Nationally, the median down payment for first-time buyers is around 6%, and for all buyers, it’s about 13%. So, where did this 20% myth come from? It’s a traditional benchmark that doesn’t reflect today’s lending landscape.

Des Moines Housing Market Snapshot

Before we dive into how you can lower your down payment, let’s take a quick look at the Des Moines housing market:

Median Home Value: As of January 2025, the average home value in Des Moines is $199,730, marking a 4.6% increase over the past year.
Median Sold Price: Homes are selling for a median price of $215,388, up 5.1% from last year. The median price per square foot is $191.
Market Dynamics: Properties typically go pending in about 33 days, indicating a fairly brisk market.

Down Payment Assistance Programs in Des Moines

Good news: several programs are designed to help you get those keys without draining your savings.

Iowa Finance Authority’s FirstHome Program

What It Offers: A $2,500 grant or a second loan up to 5% of the home’s sale price to assist with down payment and closing costs.
Eligibility: First-time homebuyers with household income limits varying by county (e.g., $96,500 – $114,600 for a household of two). The home purchase price limit is $510,000, which may be higher in targeted areas.

Federal Home Loan Bank’s Home$tart Program

What It Offers: Up to $15,000 in grant funds for qualifying first-time homebuyers, which can be used for down payment and closing costs.
Eligibility: Available to those with household incomes under 80% of the area median income. Funds are distributed through member financial institutions, including several in Des Moines.

Neighborhood Finance Corporation (NFC) Down Payment Assistance

What It Offers: Programs like the Neighborhood Reinvest Down Payment Assistance provide $10,500 at 0% interest, deferred until you sell or refinance. Additionally, a $2,500 closing cost assistance is forgivable after five years.
Eligibility: Income limits apply (e.g., the maximum household income for the down payment assistance is 100% of the area median income).

Polk County Down Payment Assistance Program

What It Offers: A $30,000 deferred loan at 0% interest to assist with down payment and closing costs.
Eligibility: Designed for low-income families aiming for sustainable homeownership, administered by the Neighborhood Finance Corporation.

Why Waiting to Buy Could Cost You More in the Long Run

Many buyers assume that waiting will put them in a better position—maybe prices will drop, interest rates will improve, or they’ll have more saved up for a down payment. But in today’s market, waiting could actually make homeownership more expensive. Here’s why:

Home Prices Are Trending Up – Even if prices aren’t skyrocketing, they’re still increasing year over year. A home that costs $300,000 today could be $315,000 or more next year, meaning you’ll need a larger loan and down payment when you finally decide to buy.
Mortgage Rates Are Unpredictable – Many buyers are hoping for rates to drop, but the reality is, they fluctuate. Even if they go down slightly, there’s no guarantee they’ll hit historic lows again. And if they rise, your monthly payment could be significantly higher, even if home prices stay the same.
Rent Prices Keep Climbing – Every month you wait is another month of paying rent instead of building equity. Homeownership allows you to lock in a predictable payment, while rent typically increases year after year, making it harder to save for a home.
Equity Growth Starts Now – The sooner you buy, the sooner you start building wealth through home equity. Even if home values rise slightly after you buy, that appreciation benefits you instead of making the market more expensive when you eventually decide to jump in.

Bottom line? The perfect time to buy is when you’re financially ready—not when you think the market will magically become ideal. If homeownership is on your radar, it’s worth exploring your options now before affordability becomes even more challenging.

Why Work with a Local Expert?

Navigating these programs can be a maze, but you don’t have to go it alone. As a seasoned realtor in the Des Moines area, I can guide you through the process, ensuring you tap into the resources best suited to your situation. Let’s debunk myths and turn your homeownership dreams into reality—without the unnecessary 20% down payment hurdle.