By Sean Stephens
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What is the Lowest Down Payment for a Conventional Loan?

What is the lowest down payment allowed on a conventional loan?

For those who may not know, conventional loans allow for primary residences, second homes, and investment properties, but many still think you need a 20% down payment to qualify?

In today’s video I will share the details on the minimum down payment amounts required and how you may be able to save money on your next conventional loan.Low Down Payment Florida Conventional Loans

However, before we get started, don’t forget to take advantage of our Second Chance Service which is a great way to get access to an expert second opinion which can be especially helpful for those recent loan denials or if you are just in need of guidance on how to make the most out of your home loan qualification.

800-806-9836 Ext. 280
SeanS@MPLX.org

What is the lowest down payment allowed on a conventional loan?

As a starting point, conventional loan qualifying is determined by Fannie Mae and Freddie Mac guidelines and with recent improvements, the minimum down payment required for primary residences, second homes, and investment properties have allowed conventional loan programs to become more affordable.Low Down Payment Florida Conventional Loans

Primary Residences:

  • Per Fannie Mae, a principal residence is a property that the borrower occupies as his or her primary residence
  • Under the Fannie Mae HomeReady® program and the Freddie Mac Home Possible® mortgage, both are designed to assist low-to-moderate income borrowers by only requiring a 3% down payment.
  • Remember that applicants do need to meet conventional qualifying standards and because these programs have additional eligibility requirements, we are here as a resource to answer your questions.
  • Currently, we can only work with single family homes and condominiums under these 3% down payment programs, but for those who may be interested in a manufactured home, Fannie Mae does allow for a minimum 5% down payment for a primary residence manufactured home loan .
  • Remember, additional guidelines will apply on manufactured homes so just call or email with your scenario so we can assist.

Second HomesLow Down Payment Florida Conventional Loans

  • Fannie Mae defines a second home as one that must be occupied by the borrower for some portion of the year and may not be a rental property or timeshare arrangement.
  • While many banks and credit unions require a 20% down payment, both Fannie Mae and Freddie Mac only require a minimum down payment of 10% for a second home conventional loan.

Investment Properties

  • Fannie Mae classifies an investment property as one that is owned but not occupied by the borrower.
  • Traditionally, investment properties were limited to 20% down payment or greater, but now both Fannie Mae and Freddie Mac only require a minimum down payment of 15% on investment properties.

Important Reminders

In summary, conventional loan have become more affordable and do not require a 20% down payment in all circumstances, but remember that minimum credit requirement will apply for all loan programs.

As always, I want to thank everyone for the continued recommendations and trusting us with all of your mortgage needs.

Whether it be FHA, VA, USDA, or Conventional – Just call or email to discuss your scenario and let us show you the “Metroplex” difference.

800-806-9836 Ext. 280
SeanS@MPLX.org

Just call or email if you have any qualifying questions, want to discuss a new scenario, or would just like to take advantage of our free 2nd opinion service which is great for those existing transactions

I want everyone to make it a great day, and look forward to seeing you right here for the next tip of the week!

Qualifying for a home loan can be both difficult and overwhelming, but when you work with a lender that specializes and understands the loan process, it is a match that can open the door to home ownership.

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So, keep us in mind for your next pre-qualification or if you have a current transaction experiencing financing difficulty and need an expert opinion.

Whether it be USDA, FHA, Conventional or VA loans, just call or email to discuss your scenario and let us show you the "Metroplex" difference!

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