Conventional 3 Percent Down Payment Program

Conventional 3 Percent Down Payment Program

Conventional 3% Down is a Fannie Mae program that requires a minimum down payment of 3% for qualified homebuyers with limited funds. This is a lower down payment than FHA financing, and these loans also usually have lower mortgage insurance costs.

Source: Academy Mortgage

  • Financing: 97% financing with a 3% down payment (gift funds allowed). Closing costs may be paid by the property seller, employer assistance, or with gift funds.

  • Mortgage insurance (MI): Flexible plans and payment options for MI. No upfront MI is required. Unlike some other loan programs, MI drops off automatically when the loan is paid down to 78% loan-to-value.

  • Qualifications: The loan must be approved through Fannie Mae’s automated Desktop Underwriter system. One borrower must be a first-time homebuyer, which is defined as a borrower who has not had an ownership interest in a property in the last three years.

  • Eligible properties: One-unit, primary residence; planned unit development (PUD); and Fannie Mae-eligible condominiums.


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Dated: June 18th 2016
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