1% Down Payment Program Now Available!

Freddie Mac has come out with a new program designed to help more borrowers obtain financing with lower down payments. Since the real estate crash of 2008 Fannie Mae and Freddie Mac have increased their down payment rules. It now looks like it’s starting to soften a bit. Under this new program the borrower only has to contribute 1% down payment which can come from their own funds or a gift. Below are some of the parameters of the program:

  1. Minimum 700 credit score.
  2. Maximum debt-to-income ratio of 43%.
  3. 3% seller concessions for closing cost and pre-paids.
  4. Program available with or without monthly mortgage insurance.
  5. Borrower can not make more than 100% of area median income (roughly $77,000 in Albemarle County).

This should help open up the first time buyer market. While FHA has been consistent with the 3.5% down program and Rural Development is available in rural areas with 0% down payment, it is now nice to get Freddie back in the ball game!

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7 Comments

Filed under Loan Programs

7 responses to “1% Down Payment Program Now Available!

  1. Hi,

    Is this program ONLY for first time home buyers?

    Nancy

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  2. What if I have a rental house–it was my home. And want to use this program? My credit score is around 803. FYI. Nancy

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  3. Kevin Lacey

    Available with or without Mortgage Insurance? What dictates whether there is or isn’t.
    Kevin Lacey

    • Totally up to the borrower. The borrower can pay the monthly mortgage insurance or have the rate a bit higher and not pay it monthly. We would run the different scenarios based on the borrower’s credit score and then the borrower would pick the one they like best.

      Philip

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