Are you interested in buying a home, but are concerned about how to afford a down payment? Coming up with money for a down payment is typically one of the biggest concerns for potential homebuyers. If this is a concern for you, there is a great option available that allows you to obtain a conventional loan with a 3% down payment. Our loan specialists at Foundation Mortgage can work with you to determine if a 3% down conventional loan is a viable option for you in order to help you purchase a home. If you are looking to purchase a property in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, contact us today for a consultation.
A Conventional Loan With 3% Down
Conventional loans with 3% down were created to make home ownership an accessible option to qualified buyers who do not have a substantial amount of money available for a large down payment. Conventional loans are loans that are not insured through the government, and often meet the income and down payment requirements set by government-sponsored enterprises like Fannie Mae and Freddie Mac. The purpose of these enterprises are to stimulate the economy by promoting the purchases of homes and by encouraging financial institutions to lend money to those who are seeking to buy a home. Conventional loans have many benefits, including lower costs, great rates, and more term flexibility.
Fannie Mae offers two types of 3% down conventional loans known as “Conventional 97”, which is available to first time homebuyers, and “Home Ready”, which is available in specific low income areas and is available to buyers who have previously purchased a home. Freddie Mac offers a 3% down mortgage known as “Home Possible Advantage”, and is similar to the Fannie Mae loan versions. Foundation Mortgage can help you understand which of these 3% down programs would be the best alternative for your situation.
Requirements For a 3% Down Conventional Loan
When applying for a 3% down conventional loan, there are several requirements to consider, including:
- A minimum credit score of 620, although a higher score, (generally around 700), is considered more desirable
- Financial stability, including steady employment history and enough savings to cover the amount of several mortgage payments
- The property must be a single unit residence
- You must have a fixed-rate mortgage
- The property must be your primary residence
- The loan must be at or below $514, 000
Getting Help With a 3% Down Conventional Loan
If you are a home buyer with a limited amount of funds to pay for a down payment, but have decent credit, a 3% down conventional loan may be an excellent option for you. Our mortgage specialists at Foundation Mortgage can help you determine your eligibility and help you find your dream home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee. Contact us today to see if you qualify.