Four Low Down Payment Mortgage Programs
Too many Americans who want to buy a home feel they can’t because they don’t have the cash to put 20 percent down on the mortgage. It’s safe to say that the down payment is one of the biggest obstacles to homebuying today. And, it doesn’t have to be. Here are four low down payment mortgage programs to get you in the home of your dreams.
1. Fannie Mae’s 3-percent-down mortgage
Launched a few years ago, Fannie Mae’s Conventional 97 is a brilliant alternative to the FHA-backed loan. In fact, it is “among the most in-demand programs for today’s homebuyers,” according to Dan Green at TheMortgageReports.com.
Conventional 97 is what FHA used to be — ideal for both the first-timer and repeat homebuyer who lacks a large down payment. While borrowers are still required to purchase mortgage insurance, the premiums “are usually less expensive than those of comparable FHA home loans,” according to Green.
Best of all, according to Tim Lucas, editor at MyMortgageInsider.com, borrowers can qualify with scores as low as 620 and “gift funds can be used for down payment and closing costs.”
2. Freddie Mac HomeOne℠ loan
Like Fannie Mae’s loan, HomeOne helps first-time homebuyers achieve the dream of homeownership.
- No income limits
- No geographical limits
- Allows for the purchase of a single-family home, condo or townhome
Home buyers are required to have at least 3 percent for a down payment and a credit score of at least 620. If first-time buyers, borrowers must agree to attend a buyer education course.
Naturally, there is more to know about Freddie Mac’s HomeOne loan. You can get the details either from your preferred lender or online at SFFreddieMac.com.
3. Freddie Mac Home Possible®
Freddie Mac offers an alternative to the HomeOne loan and that’s the popular Home Possible mortgage. This program is deal for your lower income buyers who lack a big down payment and require “flexible sources of funds.”
These sources can be family members, employer assistance “secondary financing and sweat equity,” or a combination of these, according to Freddie Mac’s website.
Home buyer’s qualifying income (on an annual basis) cannot exceed 80 percent of the AMI.
There’s a 3 percent down payment, but unlike other similar programs, a borrower can quality for 105 percent LTV with Freddie Mac’s Affordable Seconds®.
4. HomePath Ready Buyer™ program
Another Fannie Mae program, HomePath Ready Buyer, offers 3 percent down payment assistance for qualified borrowers who agree to participate in an online homebuying course and then purchase a HomePath property.
Home buyers will need to request a course completion certificate and then include it when your agent submits the offer on a HomePath property.
“The request for closing cost assistance must be made at the initial offer in the HomePath Online Offers system,” according to information on the HomePath website.
Home buyers must not have owned a home within the past three years, they must agree to reside in the home as their primary residence and take possession within 60 days of closing.
Need help choosing the program best for you? Contact our team today @ 704-907-7907