Down payment costs are rising. Here's what 20% means in your area on Long Island.

Long Island homebuyers are enduring another year of record-setting prices and those who aspire to a 20% down payment must shell out more than ever. 

At June's median prices, a Nassau buyer would need $175,000 to put down 20%, and a Suffolk buyer would need $150,000. 

That's based on a median price of $875,000 in Nassau County and an all-time high $750,000 price in Suffolk County, according to the latest data from OneKey MLS. Those median prices are based on single-family home sales that closed in June. 

Since the pandemic, home prices have risen faster than incomes, and those who are able to buy must devote a greater share of their paycheck toward housing costs, Newsday previously reported. 

Of course, buyers aren't required to set aside 20% for a down payment. 

The median down payment among first-time buyers rose to 10% nationwide, which was its highest level since 1989, according to the National Association of Realtors.  

For repeat buyers, the median down payment was 23% nationwide, which reflects how homeowners benefit from equity in their existing home and gain an advantage when they make their next purchase. 

Some first-time buyers can put down as little as 3% for a conventional loan or 3.5% for a Federal Housing Administration loan, and qualifying veterans can access VA loans that require no down payment, according to federal guidelines. 

But given Long Island prices, that will leave new homeowners with large monthly payments. 

Jonathan Chandler, a real estate agent at Compass in Rockville Centre, said he’s worked with buyers who have purchased using a 10% or even a 3.5% down payment.

But in today’s competitive market, sellers often favor buyers with larger down payments because they believe they are more likely to successfully close on the deal.

“The higher the down payment you’re putting down, the lower your mortgage and the better chance you have of getting an accepted offer,” he said. 

Buyers who put less than 20% down must also account for the monthly cost of private mortgage insurance for a conventional mortgage. FHA borrowers must pay a mortgage insurance premium regardless of their down payment amount. 

There are down payment assistance programs to help first-time buyers. The State of New York Mortgage Agency offers programs for income-eligible buyers, including a forgivable loan of as much as 3% of the purchase price up to a maximum $15,000. The loan is forgiven if the homeowner stays in the home and doesn't refinance their loan for at least 10 years.

County and local governments also offer periodic down payment assistance programs, including some administered by the nonprofit Long Island Housing Partnership. 

But applications for programs run by Nassau and Suffolk counties as well as the towns of Babylon and Brookhaven are currently closed. 

The nonprofit is waiting on a new round of federal down payment assistance funding through the U.S. Department of Housing and Urban Development before it reopens applications. Long Island Housing Partnership expects more funding could be available in late 2026 or early 2027, said James Britz, the organization's executive vice president. 

In the meantime, Britz said buyers can attend the nonprofit's homebuyer counseling courses to get prepared to purchase. 

Prospective homebuyers can also check with their lenders or use a free tool from the website Down Payment Resource to check their eligibility for aid. 

"I always encourage [buyers] to shop around with different lenders," said Deepa Sachdev, an associate broker at Exit Realty Achieve in Smithtown. "Different lenders offer different programs."

Sachdev said some buyers are using gifts and borrowing from family to come up with down payments. 

"That's one way people are doing it," Sachdev said. "It's really hard for people to afford the down payments the way the prices are on Long Island." 

Want to know what a 20% down payment looks like in your area? Check out the chart below. 

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