It’s Official: Zero Down is Gone

Iceage_2Unless you’re eligible for VA financing within the conforming loan limits, 100% LTV financing (aka "zero down") is no longer available in the conforming mortgage markets.   

The following products are extinct:

  • Fannie Mae Flex 100
  • Freddie Mac 100
  • My Community Mortgage 100
  • Home Possible 100

If you are short on down payment with credit scores below 680, you should consider FHA financing, which is not as credit score sensitive as conventional programs.  Fannie Mae Flex 97 is still available as well as Home Possible 97.  Both conforming programs allow for 3% down.

Home buyers should also plan on having "reserves" after closing.  The amount of reserves may vary depending on the program from 2 – 6 months of proposed mortgage payments for owner occupied when it’s said and done.   Real estate agents, your first time home buyers may need help with closing costs from Sellers…if they’re willing…in order to meet the reserve account conditions. 

We’re rolling back the underwriting guidelines…not all the way back to the ice age…but close!

If you’re considering buying a home or refinancing, meet with your Mortgage Professional sooner than later so you have time review your credit and consider your options.


  1. Rhonda – Of you utilize a seller paid down-payment assistance program like Ameridream along with an FHA loan, a borrower can purchase a home with zero down.

  2. I should rename this post “conforming zero down is gone”…you’re right Tony. Although I must confess…I’m surprised that HUD is allowing programs like Ameridream and Nehemiah.

  3. Wow! I know it was out of control, but there’s got to be a happy middle ground somewhere!
    Thanks for the update!

  4. Good Info about new qualifying standards. I am the president of one the condo boards and I was asked by a mortgage lender to raise our fidelity insurance coverage from $50,000 to $52,800 because she said the underwriter is asking for the coverage to equal 20 x number of units x 3. Did they tighten requirements on this or is it something the underwriters overlooked before if it was close?

  5. downpayment assistance programs….I wonder how long it will be until these are eliminated too.

    My prediction: lending guidelines will CONTINUE to get tighter.

  6. Micahel, I’m not aware of lender guidelines tightening on condos…but it would not surprise me in light of our current mortgage climate.

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