Conventional 97
Fannie Mae-backed product which allows for a 3 percent down payment, ultra-low mortgage insurance rates, and a 100% gift from blood or by-marriage relatives. The Conventional 97 is cheaper than an FHA 3% down mortgage because it does not require the upfront mortgage insurance premiums and has cheaper annual mortgage insurance rates. For example, 3 percent on a $200,000 home purchase would be $6,000 for down payment in comparison to a FHA mortgage would require at least $7,000 down to cover mortgage insurance premiums.
Some loan program highlights include:
The 97% loan-to-value program is meant to help home buyers who might other qualify for a loan but lack the resources to make a 5% down payment. This opportunity is a great alternative to an FHA loan.
Some loan program highlights include:
- The program may only be used for single-family dwellings
- The loan amount is capped to $417,000
- Fixed rate mortgage are available (Adjustable rates are available with 5% down payments);15 and 30 year terms are available
- Private Mortgage Insurance (PMI) is require until the home value equals 78-80% Loan-to-Value
- This program does not require an upfront paid PMI premium or a funding fee
- A credit score of 680 is required
- At least one of the borrowers on the loan must be a first time homebuyer
- Closing cost may be paid by the seller up to 3% of the sales price
- Eligible borrowers cannot have a net worth exceeding 50% of the sales price of the property
- If an applicant has a credit score of 720, a gift of any amount can be accepted for a down payment
The 97% loan-to-value program is meant to help home buyers who might other qualify for a loan but lack the resources to make a 5% down payment. This opportunity is a great alternative to an FHA loan.
