Blog: New Report Shows Saving 20 Percent to Buy a Home Takes 20 Years on Average; Over 1 Million Avoided the Wait in 2018 by Using Private Mortgage Insurance

June 5, 2019

Texas, Florida, California, Illinois, and Ohio Round Out the Top Five States for Low Down Payment Mortgage Lending

WASHINGTON, June 5, 2019 — U.S. Mortgage Insurers (USMI), the association representing the nation’s leading private mortgage insurance (MI) companies, today released its annual report detailing low down payment insured mortgage lending in all 50 states and the District of Columbia. The report breaks down on a state-by-state basis low down payment mortgage lending with private MI, including the number of borrowers helped, the percentage of borrowers who were first-time homebuyers, average loan amounts, average FICO credit scores, and provides an analysis of how long it would take those borrowers to save for a 20 percent versus a five percent down payment.

“No, you do not need a 20 percent down payment to gain mortgage approval,” said Lindsey Johnson, President of USMI. “Our report underscores the critical role private MI plays in helping millions of first-time and middle-income homebuyers bridge the down payment gap across the United States. For over 60 years, private MI has helped provide Americans with affordable access to mortgage credit while also protecting taxpayers and the federal government from undue mortgage credit risk. Millions of borrowers have relied on private MI to responsibly purchase homes and MI will continue to facilitate the dream of homeownership going forward,” continued Johnson.

USMI finds that it could take 20 years for a household earning the national median income of $61,372 to save 20 percent (plus closing costs) for a $262,250 single-family home, the national median sales price. However, that wait time drops to seven years if the household purchases a home with a 5 percent down, where the loan is sustainably backed by private MI. This represents a 65 percent decrease in wait time at the national level, and USMI found the same percentage decrease at the state level.  

Since 1957, MI has helped more than 30 million families qualify for a mortgage. In 2018 alone, MI helped more than one million borrowers purchase or refinance a mortgage, nearly 60 percent of which were first-time homebuyers, and more than 40 percent had annual incomes below $75,000. The average loan amount purchased or refinanced with MI was $244,715 and the average FICO score for these borrowers was 741, compared to a 733 score for all home loan borrowers. The below table shows the top five states in which MI was used by borrowers to purchase or refinance homes in 2018.


State Number of Borrowers 
Helped with Private MI
Texas 89,738 57 percent
Florida 77,565 56 percent
California 71,996 69 percent
Illinois 48,200 65 percent
Ohio 43,761 59 percent


In addition to the findings on how MI helps borrowers qualify for low down payment mortgages, the report also highlights the role MI plays in reducing the federal government’s, and therefore U.S. taxpayers’, exposure to mortgage credit risk. Private MI serves as credit protection against mortgage credit risk in the event a borrower defaults on his or her mortgage, meaning every dollar that an MI company covers when a borrower defaults on his or her mortgage is a dollar that the GSEs and taxpayers do not have to pay. In fact, since the 2008 financial crisis the MI industry has paid over $50 billion in claims – losses the government and taxpayers did not have to bear.

“The fact that private mortgage insurance has been helping Americans qualify for low down payment mortgages for more than six decades is a testament to the important access, stability, and credit protection the MI industry brings to the housing finance system,” added Johnson. “In recent years, the private MI industry has become even stronger with more robust underwriting standards, stronger capital requirements, and improved risk management. The industry is well-positioned to continue its important work, and we look forward to further helping grow American homeownership.”

The complete report on MI in the U.S. is available here, along with all 50 state fact sheets and data for the District of Columbia.