If you’re looking for a low down payment mortgage without an FHA loan, there are four alternatives you can consider. These options can help you save on mortgage insurance premiums while requiring only a 3% down payment. Here are the four options:

1. Fannie Mae’s HomeReady Mortgage: To qualify for this mortgage, you need a credit score of at least 620, an income below 80% of the area median income, and a debt-to-income ratio below 50%. This loan allows you to purchase or refinance a one-unit home and offers the flexibility to receive down payment assistance from various sources.

2. Fannie Mae’s Standard 97 Home Loan: Similar to the HomeReady mortgage, this loan requires a 3% down payment. It is available for first-time homebuyers and can also be used for refinancing a Fannie Mae-owned home loan. The credit score, PMI, and DTI requirements are the same as those for the HomeReady mortgage.

3. Freddie Mac’s Home Possible Mortgage: Designed for low- to moderate-income individuals, this mortgage has income limits but allows for exceptions in low-income census tracts. It offers the option to use “sweat equity” towards the down payment and closing costs. The Home Possible program doesn’t have specific credit score or DTI requirements but considers the overall borrower profile.

4. Freddie Mac’s HomeOne Loan: Comparable to Fannie Mae’s Standard 97 mortgage, this loan has no income restrictions and requires at least one borrower to be a first-time homebuyer. It can be used for purchasing or refinancing a Freddie Mac-owned home. Like the Home Possible Mortgage, the HomeOne Loan doesn’t have specific credit score or DTI requirements but assesses the borrower’s overall financial profile.

All four of these mortgage options require you to finance a primary residence, not a second home or investment property. With these low down payment mortgages and the possibility of down payment assistance, homeownership becomes more accessible, especially for individuals with stable income, limited debt, and good credit.

Prime Choice Funding has a variety of loan products to help borrowers with any situation! If you are planning to purchase a new home or refinance your existing home, we can help with your homeownership goals, call us at (877) 787-7463 or click here to get started.