After a brief disappearance in the economic downturn, 3% down payment loan products are back. This is especially important to our first-time buyer market and our returning buyer who has had a 3 year or longer wait period after an adverse credit occurrence. This is a helpful product to get back into the home purchase arena. Fannie Mae (FNMA) loans, conventional conforming products are now available. Check your local market for loan limits in high cost areas but for most of the country the loan limit for a FNMA loan is $453,100.
All loans will require private mortgage insurance (PMI). This expense may be less costly monthly for a borrower with a higher credit score than the mortgage insurance carried on a FHA loan that requires a 3.5% down payment. PMI also can be dropped at some point down the road when there is enough equity in the home versus FHA which will require life of loan mortgage insurance if a minimum down payment was made.
Additionally, there may be down payment assistance programs to help with the 3% down payment. There are separate guidelines for those products. Gifts from family members are also allowed on the FNMA conventional programs.
For more information on low down payment options, please contact me and we will discuss what will work for you.