Low-Down-Payment Programs, Renovation Loans & Down Payment Assistance Options
The newly released 2026 conforming loan limits are giving homebuyers and homeowners across Washington State more borrowing power and more flexibility. Higher limits mean more buyers can qualify for competitive conforming mortgage programs—often with lower down payments, reduced mortgage insurance, and expanded underwriting options.
Below, we’ll break down some of the most popular conforming mortgage programs, including HomeReady®, Home Possible®, renovation loans, and WSHFC down payment assistance. We’ll also highlight a major update: Fannie Mae no longer requires a minimum credit score for eligible borrowers through its automated underwriting system.
1. Low-Down-Payment Options: HomeReady® and Home Possible®
What Are These Programs?
Fannie Mae’s HomeReady® and Freddie Mac’s Home Possible® are two of the most accessible conventional loan options for first-time and low-to-moderate income buyers in Washington.
Benefits of HomeReady® & Home Possible®
- Down payments as low as 3%
- Flexible income limits based on property location
- Reduced PMI (mortgage insurance)
- Ability to use non-occupying co-borrower income
- Online homeownership education for long-term success
- Grants may be available
These programs are especially helpful for buyers who want a low-down-payment conforming mortgage without the long-term cost associated with FHA loans. Both HomeReady and HomePossible are available for refinancing as well!
2. Renovation Mortgages: Buy and Improve with One Loan
Many Washington homes—especially older or competitive-market homes—need updates. A conforming renovation loan allows you to finance both the purchase and the remodel in one mortgage.
Popular Renovation Loan Options
- Fannie Mae HomeStyle® Renovation
- Freddie Mac CHOICERenovation®
Why Buyers Choose Renovation Mortgages
- One loan, one closing, one monthly payment
- Based on the future improved value of the property
- Can be used for cosmetic or structural improvements
- Eligible for primary residences, second homes, and certain investment properties
With higher 2025 loan limits, more Washington buyers can qualify for renovation financing while staying within conforming guidelines.
3. Washington State Housing Finance Commission (WSHFC) Programs
Down Payment Assistance Through Home Advantage
For many buyers, the biggest hurdle is the down payment. That’s where the Washington State Housing Finance Commission (WSHFC) comes in.
The Home Advantage program pairs a conforming first mortgage with a zero-interest, deferred-payment second loan to help cover down payment and/or closing costs.
Home Advantage Highlights
- Down payment assistance up to 5% of the loan amount
- Flexible credit requirements
- Available statewide
- Can be paired with conventional conforming, FHA, VA, or USDA loans
- Designed to make homeownership more affordable for Washington residents
This is one of the most powerful resources for first-time homebuyers across Washington State.
4. Fannie Mae Removes Minimum Credit Score Requirement
A major policy update: Fannie Mae no longer has a minimum credit score requirement for eligible borrowers who receive an Approve/Eligible from the automated underwriting system.
Why This Matters
- Helps buyers with limited or no credit history
- Provides more flexibility for borrowers rebuilding credit
- Expands access to conforming interest rates instead of higher-cost non-QM programs
Lenders may still apply their own overlays, so it’s important to work with an advisor who understands how these guidelines apply to your situation.
Why the 2026 Conforming Loan Limits Matter for Washington Buyers
These updates—combined with higher loan limits—give buyers across Washington State more opportunities to:
- Qualify for lower down payments
- Access more affordable mortgage insurance
- Use flexible underwriting
- Finance renovations
- Reduce out-of-pocket costs with down payment assistance
Whether you’re a first-time buyer, a move-up buyer, or a homeowner considering a refinance, 2025 brings expanded access to affordable conventional mortgages.
Ready to Explore Your Mortgage Options?
As a Mortgage Advisor serving clients throughout Washington State, I’m here to help you understand how these programs—and the new conforming loan limits—may benefit your specific goals.
If you’d like a personalized review or want to compare options for a purchase or refinance, let’s talk!
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