In recent years, the only little to no down payment loan programs were offered by government agencies. With costly up-front funding fees, income requirements, and/or property overlays these programs fell just out of reach for many borrowers.
Now, Fannie Mae is offering a loan program known as Conventional 97. This program boasts a 3% down payment option to home buyers as well as an opportunity for home owners with little equity to refinance.
Who is Conventional 97 for?
First time home buyers & Home owners with Fannie Mae loans
Who is a first time buyer?
A person who has not owned a home in the past 3 years. Even if you owned a home in the past, and have had no ownership spanning the previous 3 years, you are considered a first-time buyer.
Can you put down more than 3%
Putting down between 3-4.99%, you are using Conventional 97, anything over 5% is another program.
Is Conventional 97 BETTER than an FHA loan?
What’s best for one buyer may not be best for another. Comparing loan programs based on the needs and goals of a particular individual is very important.
Is there an upfront funding fee like with FHA loans?
No, this can sometimes make this loan “cheaper” than FHA loans.
What terms are available?
Conventional 97 offers only a 30 Year fixed. Shorter terms and adjustable-rate mortgage (ARM) programs are not available.
How much can I borrower?
Only conforming loan limits are allowed. Typically, you can borrow $417k or less. High cost areas are an exception; we can check your local conforming loan limits.
Are second home or investment properties eligible?
No. Only owner occupied properties qualify.
Do I have to attend home buyer counselling?
No, there is no first-time home buying counselling requirement.
Do I have mortgage insurance with Conventional 97?
Yes, you will need private mortgage insurance. We will give you all your mortgage insurance options and arrange it for you during application.
How do I refinance under Conventional 97?
Only Fannie Mae owned mortgages can be refinanced under Conventional 97. If you have little equity and would like to know if your loan is owned by Fannie Mae, we can look this up for you.
Can I take cash out with this program?
No, only limited cash out loans are permitted. Limited cash out allows borrowers to receive $2,000 or 1% of the loan value (whichever is lower) back at closing. Anything over is considered cash-out.