You don’t need 20% down to buy a house: 100% and 97% LTVs


In light of the tightening guidelines in the mortgage industry, I can understand how a consumer might think they need to save up a hefty down payment to purchase a home.   The fact is, there are many programs available that allow minimum down payments.   Here’s a small sample:


Fannie Mae and Freddie Mac both offer 100% loan to value programs with either LPMI (lender paid mortgage insurance) or monthly private mortgage insurance.  Conforming loan limits do apply (currently $417,000 for a single family dwelling).   620 minimum credit score.   These programs may allow gifts from family as well.


The down payment for a FHA insured mortgage is approximately 3%.  Sellers can contribute up to 6% as long as the buyer is investing a minimum of 3% into the transaction.    Gifts from family are acceptable for the entire down payment and closing costs.   Loan limits do apply.   Very competitive interest rates with low monthly mortgage insurance (upfront mortgage insurance is financed into the loan).   FHA mortgages do not use credit scores (it does consider credit history) and do consider alternative credit for borrowers who have not established a credit history.


The original zero down loan created for Veterans.   Sellers can pay all of the closing costs if negotiated in the purchase and sale agreement (also referred to as "double zero down").  Interest rates are very competitive with conforming rates.  There is an upfront VA funding fee that is typically financed into the mortgage.  There is no monthly mortgage insurance.   

To find out if you qualify for one of these programs, contact a qualified Mortgage Professional in your area.   Be wary of any lender who instantly steers you away from FHA or VA financing.  This could simply be a case of them not being an approved lender and therefore they’re not able to offer it.

Regardless of what the underwriting findings are on any of these loans, when you’re buying a home, I strongly recommend that you have a minimum of 3-6 months of savings available in your accounts after closing.   Life happens…even when you own a home and it’s best to have an emergency cushion in the event you need it.


  1. The loan programs still exist? That’s great. But the qualifications for these programs are probably higher. Correct?

  2. Clifford, the guidelines are more traditional, as if you’ve gone back pre-subprime days. What subprime programs are available carry much higher rates and I probably would not recommend.

    The programs I’m referring to offer “common sense” underwriting (especially FHA) with total debt to income ratios around 43%.

Speak Your Mind