What is a 97% Conventional Loan?
Good news for those of you thinking about purchasing a home with a Conventional mortgage. The 3% down payment on a Conventional home loan is still around and kicking! This will definitely help home buyers by providing another option then the 3.5% down payment FHA loan.
Who will the 3% down Conventional Home Loan help?
The 3% down Conventional mortgage is now backed through Fannie Mae’s My Community Mortgage, as well as for standard conventional loans. This program is designed for first-time homebuyers that may not have the resources for a large down payment.
There are some guidelines that need to be met. On the Fannie Mae My Coummunity Mortgage, at least one of the borrowers on the loan must be a first-time homebuyer in a purchase transaction. The My Community Mortgage program is only available for low to moderate income families and requires home buyer education prior to loan closings.
The standard conventional mortgage, the traditional conventional loan that most borrowers are acustom to, is also designed for first-time homebuyers. The standared 3% conventional loan does not have income restrictions. Which will help a lot of homebuyers and sellers.
2023 Arizona Max Conventional Home Loan Limit is $726,200 (for single family 1 unit homes)
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What are the benefits of using a 3% Down Conventional Mortgage?
The Fannie Mae 3% (FNMA 97) down may be an alternative option to FHA and help many homebuyers avoid the high monthly mortgage insurance tied to the FHA loan – which is now for the life of the loan (unless you put 10% or more down).
There are several advantages to using a 3% down conventional loan versus an FHA home loan. There is no upfront MIP or mortgage insurance premium on a conventional loan, monthly mortgage insurance (MI) is lower and the MI will eventually fall off the loan when the loan-to-value or LTV reaches a certain point and with an FHA, it is the life of the loan.
Joseph Small and his Team at Patriot Pacific helps Arizona and California Homeowners with all their Conventional home mortgage loan needs. Give them a call today!.
The above information is for educational purposes only. All information, loan programs and interest rates are subject to change without notice. All loans subject to underwriter approval. Terms and conditions apply. Always consult an accountant or tax advisor for full eligibility requirements on tax deduction.