Fannie Mae 97% LTV Option

First time home buyers Florida Fannie Mae 3% down payment mortgage program

Great news! Fannie Mae is expanding credit for eligible borrowers and supporting sustainable homeownership. How? By providing 97% loan-to-value (LTV) financing options that help us lenders better serve our homebuyers. You may have heard about the FHA 3.5% down payment but many home buyers don't know about Fannie Mae's 3% down payment conventional mortgage.

The Fannie Mae 97% LTV mortgage program is a great option for home buyers who have good credit but modest savings or for buyers who want to make a small down payment so their money is not tied up in real estate and they can invest it somewhere else.


Fannie Mae recently released their findings that the number one barrier to homeownership for first-time buyers is saving up enough money. In order to help expand access, they offer 97% LTV mortgages which are designed specifically for people who would otherwise be qualified but don't have a larger down payment at hand. This expansion benefits both lenders and borrowers with more options available! 

Here are a few of the key features offered with the Fannie Mae 97% LTV Programs.

Product Highlights:

  • Credit scores as low as 620

  • Down payments as low as 3%

  • Cancellable mortgage insurance after 20% Equity or 80% LTV

  • At least one borrower must be first time home buyer when down payment is less than 5%

  • Homebuyer education is required for at least one borrower only if all occupying borrowers are first-time homebuyers

  • Primary Residence

  • Fixed –15 & 30-year terms

  • 1-4 unit, PUDs, condo & manufactured

  • Non-Occupant co-borrower allowed at 95% LTV

  • No income limits

  • Flexible sources of funds 1 unit: 100% gift allowed

Unlike the HomeReady and Home Possible loans, the conventional 97 mortgage has no income limits. So it’s a better choice if you make a substantial income, or if you want to buy with a partner or co-borrower and your combined incomes would be above the allowable limit.

The conventional 97 mortgage is a bit more flexible than Fannie and Freddie’s other 3%-down options. But it still has tighter restrictions than a conventional loan with 5%, 10%, or 20% down.

For instance, you must buy the home as your primary residence. Investment properties and vacation homes aren’t allowed under the conventional 97 program.

And, if all borrowers on the loan application are first-time buyers, a homeownership education course is required. (Though this shouldn’t be seen as a con, because these courses can be very valuable.)

Some home buyers choose to make a bigger down payment because it lowers their mortgage rate and monthly payments.But, a large down payment is not required.

By making a smaller down payment now, buyers can avoid rising home prices and start building home equity. The choice is up to you.

Take advantage of Fannie Mae's 97% LTV Loan program today!