Down Payment Assistance Could Cut the Time to Save for a Home by a Year and a Half or More

Key findings: 

• A median-income household could save 10% down on the typical U.S. home after 4.2 years, according to Zillow’s estimates. With down payment assistance covering 3.5% of that, the time to save would be cut to 2.7 years. 
• Moving from a 6.5% down payment to 10% on a typical U.S. home would save a buyer $1,080 per year in monthly payments. 
• Nationally, those monthly savings would bring an additional 26,338 homes within reach for a median-income buyer.

Saving 10% down on the typical U.S. home takes the median household an estimated 4.2 years, or about four years and two months. With a down payment assistance program covering 3.5% of that 10% down payment, the same household could have enough saved a year and a half sooner. 

The same assistance also lowers a typical buyer’s mortgage payments by $1,080 a year, putting more homes within reach. Nationally, about 26,300 more active listings would become affordable in this scenario.

For this analysis, Zillow is assuming a buyer puts a total of 10% down and receives an FHA loan. However, the minimum down payment for an FHA loan is 3.5%, meaning a buyer could also use this level of assistance to cover the entirety of their down payment. Making a smaller down payment does bring up the monthly mortgage payment some, but is a viable option for a buyer with the financial means to cover the monthly payment but without the necessary savings for a down payment. Zillow research has shown that one in five renter households headed by someone ages 29 to 43 could afford the monthly cost of owning a typical home in their market with just 5% down.

A 3.5% boost cuts the time to save a 10% down payment by as much as 3.2 years

Nationally, a median-income household saving for a 10% down payment on a typical U.S. home needs 4.2 years. That number could be cut to 2.7 years with a 3.5% boost from down payment assistance, a difference of 1.5 years. 

The benefit is biggest for a buyer in some of the most expensive metro areas, led by Los Angeles, where the years to save fall from 9.1 years to 5.9 years, putting homeownership within reach more than three years sooner. Three other major California metros see gaps of more than two and a half years: San Jose (8.5 years to 5.5 years with down payment assistance), San Diego (7.9 to 5.1) and San Francisco (7.7 to 5). 

Pittsburgh is the only major metro area where down payment assistance does not shave at least a year off the time needed to save 10% down on a typical home. A median-income Pittsburgh household could save 10% down after 2.7 years, which would be shortened to 1.8 years with down payment assistance.

Lower payments save buyers $1,080 a year, bringing more listings within budget

With a 6.5% down payment and a 6.78% mortgage rate (the average rate for an FHA loan in September), the monthly payment on a $366,157 home (the typical home value in September, according to the Zillow Home Value Index) would have been $3,010, including estimates for taxes, insurance and maintenance. If given a 3.5% boost via down payment assistance, that same home purchase would come with a monthly payment of $2,920, a savings of $1,080 per year. 

The annual savings are largest in San Jose ($4,608), San Francisco ($3,396), Los Angeles ($2,880), San Diego ($2,808) and New York ($2,160).

Those monthly payment savings can bring more homes within reach. Nationally, 359,434 active listings were affordable to this hypothetical buyer with 6.5% down in September, representing 25.7% of what was listed for sale. With the 3.5% down payment assistance, 26,338 more listings would have been affordable, raising the share of affordable listings to 27.6%.

Receiving 3.5% in down payment assistance would have brought the most listings newly within reach in Dallas (864), Atlanta (712), Miami (558) and Washington, D.C. (555).

How the numbers work

For years-to-save calculations, Zillow assumes a median-income household saves 10% of its income each month. This analysis assumes a household is buying the typical home in a given metro, as measured by the Zillow Home Value Index as of September 2026. 

This analysis assumes a buyer is receiving an FHA loan, aligning with the down payment assistance program recently announced by Zillow Home Loans.

Monthly housing costs assume a buyer purchases the typical home in a given metro, as measured by the Zillow Home Value Index as of September 2026. Estimates assume a mortgage rate of 6.78%, the average for an FHA loan in September, and include estimates for taxes, insurance and maintenance.

Homes are considered affordable if the household would spend no more than 30% of its income on the total monthly payment.

What a 3.5% down payment boost could mean for buyers in the 50 largest metro areas 

* Table ordered by market size.

** In San Jose, a loan with a 10% down payment for the typical home exceeds FHA loan limits. Figures are shown for reference only.