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1% Down Conventional Loan Program

Homesite Mortgage, LLC is dedicated to providing accessible ways for borrowers to become homeowners. Whether you dream of buying your first property or want to relocate and move into a different primary residence, we’re here to help you achieve your goals. 

Our team consists of licensed closers, underwriters, loan processors and bankers. We have the experience and knowledge to provide valuable information and make recommendations suiting your needs. 

With several home loans to explore, you may wonder which option you should choose. Our professionals offer guidance to help you decide if a 1% down payment program is the best match for your homebuying journey. 

What Is a 1% Down Conventional Loan Program?

If you’re looking for an affordable way to buy a home, a 1% conventional loan may offer your solution. The Home Possible® or HomeReady loan requires lenders to cover around 2% of a down payment, with a borrower paying the remaining 1%.

Since its recent introduction, many lenders have started offering this home loan. The program aims to make homeownership more accessible to borrowers with modest incomes. 

The team at Homesite Mortgage, LLC can discuss if you qualify for the low down payment options. We aim to help you find the most competitive low rates on the market so you can save as much as possible upfront when you purchase a property. 

How a Conventional 1% Down Program Works

Homebuying involves learning what mortgage you can afford, exploring the real estate market and negotiating terms. While the down payment may feel like one last obstacle, mortgage lenders have found a way to make the journey easier for first-time and repeat homebuyers. 

A Simple and Quick Process

The 1% down payment program offers a straightforward and convenient process. After applying and entering an agreement with a lender, eligible borrowers are responsible for bringing 1% of a home’s purchase price to the closing. 

Lenders contribute the other 2% of a home’s purchase price as a gift. This gift is considered a no-strings grant, which means borrowers will never have to repay the amount.

Other Benefits Available 

Generally, private mortgage insurance (PMI) is required when a down payment totals less than 20% of a property’s purchase price. A lender may cover the PMI at no extra cost to the borrower. 

Borrowers can provide a down payment of up to 3% of the home’s purchase price and the lender may still offer the 2% grant, creating a 5% down payment. Usually, 5% is the maximum down payment allowed for this program.

Income Limits for 1% Down Programs

To qualify, eligible borrowers must usually make an amount equal to or below 80% of an area’s median income (AMI) where they plan to buy a home. Lenders follow the AMIs posted by the Federal National Mortgage Association (FNMA), commonly called Fannie Mae. 

The United States government-sponsored enterprise provides resources as a leader in the housing market. The programs, products and tools aim to educate borrowers and make mortgages more attainable. 

Want to know the AMI in a location? Consider using Fannie Mae’s AMI Lookup Tool online. The website stays up to date with the latest demographics for populations. Professionals at Homesite Mortgage, LLC can offer assistance throughout the research stages of your homebuying experience as well.

1% Down Mortgage Loan Requirements

Like any home loan, borrowers must meet certain qualifications for 1% down payment eligibility. Some conventional home loan requirements involve income, credit scores and the subject property. The mortgage follows the same guidelines as Home Possible programs. Borrowers must: 

  • Use the property as a primary residence. 
  • Not have an interest in owning other residential dwellings.
  • Complete a First Time Homebuyer course online if they haven’t owned a home in the past three years.
  • Provide 1% for the down payment, regardless of whether the amount is a gifted source of income.
  • Receive up to a 2% down payment as a gift from lenders.
  • Have a 50% maximum debt-to-income (DTI) ratio. 
  • Earn equal to or below 80% of an AMI.
  • Have a credit score of 620 or higher.

Want to know if you qualify for a 1% down payment? Each loan is tailored to a borrower’s situation and needs. Experts at Homesite Mortgage, LLC can discuss your eligibility regarding these program requirements. 

Why Choose Us for 1% Down Home Loans?

Are you interested in buying a condo, townhome or single-family residence? Homesite Mortgage, LLC aims to make your homeownership dreams a reality. Our team provides educational resources to help you feel confident making an informed decision.

Check out our blog posts to learn about the different types of loans you could choose when buying a home. We provide posts about the pros and cons of various mortgage types and give you relevant updates on the housing market. 

Browse our online learning center to discover more home loan resources. We provide frequently asked questions (FAQs), loan calculators and mortgage guides. Our team can answer any questions you have and provide you with more information. We go above and beyond to offer outstanding customer service. 

Contact Homesite Mortgage, LLC to Learn More

Buying a home is supposed to be an exciting and celebratory moment in life. Want a simple and quick way to learn if you qualify for the 1% down payment? Homesite Mortgage, LLC is ready to provide the fast answers you need.

You can submit a form online to begin. Our state-of-the-art technology saves time and requires as little effort as possible, and we use security methods to keep your personal information safe. 

After you provide some details about your request, our underwriters will get in touch with you and give you a free estimate in as little as 24 hours. Our company offers saving opportunities with low interest rates and closing costs.

We work quickly and offer a Closing Day Guarantee to close your home purchase on time. Enjoy planning your move-in date weeks in advance — we typically close loans in around 18 to 20 business days. To learn more, feel free to contact our team or schedule an appointment online. Our licensed mortgage bankers are trained to offer tailored advice. We aim to provide the best mortgage service possible for your homebuying experience.