Low Down Payment Conventional Loans | Conventional Loan Down Payment
- There are options when it comes to low down payment conventional loans.
- Conventional loan down payment options depend on the loan program itself and many factors like credit score, occupancy type, Automated Underwriting System (AUS), reserves, type of property, number of units, and other factors.
- Conventional loan down payment assistance programs require less of a down payment than traditional conventional loans.
Conventional Loan Down Payment Assistance Programs
Conventional loan down payment assistance programs were designed to help increase the American dream of homeownership opportunities. Proceeds from the grants can go towards down payment, closing costs, prepaid items, and earnest money.
- Conventional loan program that requires only 1% down payment:
- 2% purchase grant so that borrowers have a total of 3% down payment.
- No repayment required.
- 1st time homebuyers and repeat buyers allowed.
- Conforming loan limits.
- Minimum FICO of 620 credit score.
- Income limits are 100% or below the AMI.
- A Loan Originator can calculate income and determine if a borrower meets income limits.
- Lender paid mortgage insurance (LPMI) option with a minimum credit score of 640 FICO available.
- Maximum debt-to-income is determined by the Automated Underwriting System (AUS) for the low down payment conventional loan.
- Property Types: Single family detached and semi-detached, condo units in an approved project, and PUD attached and detached.
- Conventional Loan Down Payment Assistance – 4% and 5%
- Minimum 620 credit score.
- Fist time and repeat home buyers allowed.
- For the 5% grant, income must be less than or equal to 80% of AMI.
- For the 4% grant, income must be less than or equal to 100% of AMI.
- Maximum debt-to-income of 45% with an automated underwriting approval for credit scores 620-699.
- Credit scores 700+ allow debt-to-income ratios up to 50% with an automated underwriting approval.