Many homebuyers have a hard time juggling everyday expenses while saving for a down payment or closing costs. Rent, utilities, car payments, student loans, and credit cards, not to mention groceries, can sometimes drain your bank account as quickly as money is deposited. All considered, it’s no surprise saving for a home is one of the biggest hurdles to buying a home – but that doesn’t have to be your experience. Today’s buyers have mortgage options requiring down payments well below 20% of the home’s purchase price. In many cases, you can buy a home with just 3% down.1

There are also buyer assistance programs that may help cover your down payment and possibly closing costs. Funding from those programs often can be combined with financial gifts from your family and friends to reduce your out-of-pocket costs to buy a home.

How does it work?

First-time homebuyers who can’t afford a large down payment but would otherwise qualify for a home loan may be eligible for a 3% down payment mortgage. If you’re good at managing your credit and meet certain requirements, this could be the option for you.

A mortgage lender can provide the specifics, assess your financial situation, and determine eligibility. Before you contact a lender, consider these initial requirements:

  • At least one person on the loan must be a first-time homebuyer. (In this case, “first-time homebuyer” means you haven’t owned any residential property in the past three years. Or, if you’re buying the home with someone else, at least one of you hasn’t owned a home in the past three years.)
  • The home being financed must be a one-unit property (including townhomes, condos, co-ops, and PUDs) and not a manufactured home
  • You plan to occupy the home as your primary residence; and
  • The mortgage must have a fixed rate (adjustable rate mortgages [ARMs] are not eligible for the 3% down payment mortgage)

130 Year Fixed Rate Mortgage purchase loan is based on an owner-occupied single-family residence, property located in California or Nevada. Rate and payment example are for a loan of $647,184, 30-year fixed rate, note rate of 6.250% as of 6.28.22, 6.642% APR, initial principal and interest payment of $3,984.32, or $6.16 per $1000 borrowed. Example requires 97.00% loan-to-value (LTV) with tax, insurance and mortgage insurance. Impounds are required. Minimum 740 Credit Score. Payment example does not include any amounts due for prepaid interest, taxes, insurance premiums or homeowner association dues; if applicable your payment will be greater. This is not a guarantee to lend at given APR. Rates and Terms are subject to change. Other restrictions may apply. Actual rate will be determined after receipt of completed application and prior to execution of loan documents. Rate lock may not be available until final loan approval.