Conventional Low Down Payment Loans. Down Payments As Low As 5%!

No Maximum Borrower Income Restriction, No First-Time Homebuyer Requirements, Can Own Multiple Properties.

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5% Down Conventional Loan Program Guidelines

Loan Purpose

  • Purchase
  • Refinance: Limited Cash Out Refinance

Credit Profile

  • 620 minimum middle credit score for all borrowers on the loan
  • Desktop Underwriting findings must be "Approved/Eligible" and Loan Prospector findings must be "Accept"
  • Waiting period after a major negative credit event:
    Conventional Loan Type BK – Chapter 7 BK – Chapter 13 Discharged BK – Chapter 13 Dismissal Foreclosure* Short Sale, Deed-In-Lieu, Pre-Foreclosure Modified Mortgage
    Standard 4 years 2 years 4 years 7 years 4 years 2 years
    With Extenuating Circumstance 2 years 2 years 4 years 3 years (requires 10% down) 2 years No waiting period

    * If a property was included AND surrendered (i.e. property wasn’t retained and the debt wasn’t reaffirmed) in a Chapter 7 Bankruptcy, the borrower may potentially be able to defer to the Chapter 7 waiting period Vs. the Foreclosure waiting period.

Loan Amount and Down Payments

  • Loan amount not to exceed 2018 conventional loan limits of $647,200 or if the property is in a High Balance area the FHFA Conforming Loan Limits
  • Minimum down payment based on property type:
    • Primary residence:
      • 1 Unit - 5% down
      • 2 Unit – 15% down
      • 3-4 Units – 25% down
    • 2nd Home: 10% down
    • Non-owner Occupant:
      • 1 Unit – 15% down
      • 2-4 Unit – 25% down

Ratios

  • As determined by Automated Underwriting System. Requires a Desktop Underwriter “Approved/Eligible” and Loan Prospector findings must be "Accept" findings

Property Type

  • Eligible property types:
    • Owner-occupied only
    • 1 to 4 unit properties
    • Fannie Mae/Freddie Mac approved condos
    • PUD's (i.e. Townhomes)
    • Hobby Farms permitted. Call for details
    • Log cabin homes provided Appraisal Report lists other comparable log cabin homes that have recently sold in the area
  • Ineligible property types:
    • Condotels
    • Timeshares
    • Cooperatives
    • Commercial property types
    • Land
    • Manufactured housing

Co-signers

  • Non-occupant co-signers are permitted for primary residence purchases

Gifts/Down Payment

  • Owner occupied 1 unit property – entire down payment can come from a gift
  • Owner occupied 2 to 4 unit property and 2nd home – minimum 5% down payment must come from the borrowers own funds
  • Owner occupied and 2nd home – if gift is 20% or more, then there is no minimum borrower down payment requirement
  • Non-owner occupied properties – no gift giving allowed
  • Gift of equity permitted for primary and 2nd home purchase

Seller Closing Cost Assist

  • Owner occupied and second homes:
    • Less than 10% down – 3% max seller assist
    • More than 10% down - 6% max seller assist
    • More than 25% down – 9% max seller assist
  • Non-owner occupied:
    • 2% max seller assist

Documentation

  • All loans must be fully documented per Agency Guidelines
  • For Self Employed borrowers, in addition to Agency Guidelines, two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)

Terms

  • Amortization period: 30, 25, 20, 15, 10 year fixed rate and 10, 7, 5, 3 year adjustable rate