Village of townhouses. View from the height.

Do you hate the idea of making monthly payments to a landlord, but you don’t have the cash for a large down payment to purchase a home? Are you looking for your next home, but don’t have enough equity to put 20% down on your new place? Quicken Loans has a new loan option that could be just what you’re looking for.

Qualifying clients now have the ability to put as little as 1% down, while gaining 3% equity in the bargain.* That’s a pretty big deal. It means you could own a $150,000 home with as little as $1,500 down.

Every loan program has its own set of qualifications, and this one is no different. Here’s what you need to know.

Property Qualifications

This loan option can only be used to purchase a home. Refinances are not eligible. In addition, the home being purchased must be a single-unit primary residence. Second homes and investment properties aren’t allowed.

It’s worth noting that while you can use this to get a single-family home or condo, you cannot use the program to get a co-op. If the home you’re looking at still makes the cut, we can move on to your eligibility.

Financial Qualifications

To start, this program is for clients with an average FICO score of 680 or higher.

In order to qualify for this program, you must earn less than the area median for your county. For the sake of convenient math, let’s say the income limit in your area is $100,000; you’d need to earn less than $100,000 annually to take advantage of this loan option.

You should also make sure your debt is in order. Your debt-to-income (DTI) ratio cannot exceed 45%. Let’s do a quick example:

Say I make $3,000 a month. The payment on my new house might total around $700 per month. The lease on my car is $300 and I pay off a credit card balance of around $200 each month. That brings my total monthly debts to $1,200, meaning I have a 40% DTI ratio ($1,200/$3,000).

The program comes with a cool online introduction to homeownership. It’s required for first-time home buyers, but since there’s a ton of helpful content in the course, we make it available to everyone at no cost.

Do you want to get started? You can fill out your application now. Any questions? Give us a call at (800) 251-9080 or let us know in the comments.

*For example, the payment on a $200,000, 30-year fixed-rate loan at 4.375% (5.179% APR) with a LTV of 97% is $998.58. Taxes and insurance not included. Rates shown valid on publication date of 3/02/2016. Restrictions may apply.

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This Post Has 146 Comments

  1. Ok so we are “renting to own” currently basically the owners are letting us live in the house while we make payments towards the house that they will let us use for a down payment. My husband works and has been working on his credit my credit well is less then desirable will this affect us getting approved? Also i work and make decent money but it’s not on a payroll would a letter from the person giving me employment be enough proof of income? Also do co signers happen when it come to home loans? We want to purchase this year amd just make mortgage payments every month instead of the “rent”. Sorry we are new to this

    1. Hi Trish,

      You can get a cosigner with a home loan. In terms of your other questions, you really should talk to someone about your situation specifically. You can speak with one of our Home loan Experts by filling out this form or calling 888-728-4702.

    1. Hi Willie:

      Over at QLCredit, you can pull your credit report for free without affecting your score and get personalized tips on how to improve it. That would be my recommendation on where to start.

      Thanks,
      Kevin Graham

  2. Hello,
    My son is looking to buy his first house .Is there a mortgage with no down payment. Can you please email if there are any mortgages that don’t require a down payment.Thamk you.

    1. Hi Karen:

      The only mortgage option we offer with zero down payment is a VA loan. He would have to be active duty or veteran military or a surviving spouse. Other than that, we offer 1% or 3% down payment options depending on his qualifications.

      Thanks,
      Kevin Graham

  3. If I can qualify for the 1% down payment loan (being a first-time home buyer) and the home I’m after is ~$300,000 (probably less but I’m just rounding up to be on the safe side) that would mean that I need to come up with $3000.

    What OTHER fees do I need to have covered besides the $3000 and what would my monthly mortgage cost be?

    This is all new to me. I want my own home and I can afford at least $1000/month or a little more since that’s what I’m paying now in rent. I just need to know about any and all hidden fees before I make any commitments. I don’t want to start a lengthy process that I can’t see through to the end. I’m the type of person who wants all those ducks lined up in a row so I know I can pick them off easily and quickly with no hiccups or snags along the way.

    If anyone can point me to a link, video, page, …whatever …. Where I can learn more of the process that would be appreciated.

    1. Hi Garry:

      So what’s go over the actual loan process first. In addition to the down payment, you’re going to have to come up with a deposit upfront that you get back at the end. This covers things like pulling your credit reports and the cost of appraisal. You’ll also have closing costs. You can get an example of the types of things you would pay for at closing, but those are really going to vary depending on the loan. In addition to your monthly payment, you’ll also have property taxes and homeowners insurance escrowed. Until you reach 20% equity, you also have monthly mortgage insurance to think about.

      With all this being said, one of our Home Loan Experts could probably give you a much better idea of what your costs would be in your individual situation. If you fill out this form or call (888) 728-4702, one of them will be happy to talk to you.

      Thanks,
      Kevin Graham

  4. Are student loan payments a part of the debt to income ratio? Also, is the monthly income amount used in the dti ratio pre-tax or take home?

    1. Hi Roberta:

      Student loan payments are nearly always included in your DTI. As to your second question, your DTI is calculated based on pre-tax income.

      Thanks,
      Kevin Graham

  5. We are planning to finance our first home based solely off of my husband’s info because his credit score is must better. Would the annual income requirement be him only or would if be household income even though I would not be on the loan?

    1. Hi Amy:

      It’s only based on the income of the clients on the loan. In your case, we would only be looking at your husband. Hope this helps!

      Thanks,
      Kevin Graham

  6. I talked to a mortgage broker elsewhere he said in the last 2 years he has only been able to get 1 first time homebuyers mortgage to pass fha loans are easier to approve is that the same with quicken loans first time home buyers loan?

    1. Hi Rob:

      I think the best way to get individualized advice similar situation would be to talk to one of our Home Loan Experts. We would need more information than you can give us in the comments in order to give you an answer about what makes sense for you. You can get in touch by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin Graham

  7. I am looking to purchase my first home i found a home 3% would be $5700.00 i have 5 grand saved up with debt of 4200 is it worth paying down my debt to get a higher fico score to try and qualify or will my luck be better with a 3% fha loan?

  8. I am currently looking at a Fannie Mae Home Path Property. with a price of just under $70,000. Can this be used on this type of property? I am ready to move forward ASAP. Thank you.

    1. Hi David:

      You should be able to use this program assuming you qualify to move forward. It’s a Freddie Mac loan, but Fannie Mae won’t care where you get the financing to buy the home. I’m going to recommend you get started by talking to one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

  9. Hello!
    Apologies if you’ve already answered this, but since its less than 20% down is PMI still required?

    Thanks in advance!

    1. Hi Carissa:

      Yes, PMI would still be required, but you might have an LPMI option you could look at in order to avoid the monthly mortgage insurance payment. Hope this helps!

      Thanks,
      Kevin Graham

  10. How much home can you finance? I am looking at a home which is over 417000.
    Is there a cap on the amount of the purchase price?

    1. Since this is a Freddie Mac program, Freddie Mac only buys conforming loans. This means that in most areas of the country, the maximum amount that can be financed is $424,100. That’s based on a brand-new increase in loan limits, so I would be sure to talk to one of our Home Loan Experts so you can be notified about when that goes into effect. There are also areas that are considered high-cost counties where the limits may be higher. I’m going to recommend you talk to one of our experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  11. Can I use this program to buy a single family home to live in if I already own a 2 family house with an FHA loan? I plan on leaving the 2-family home rented and moving into the single family with this loan.

    1. Hi John:

      It has to be your primary residence, and you have to meet the income requirements for this particular program, but we can certainly help you work in your options as far as this loan is concerned. You can get in touch with one of our experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  12. For Orange County, CA it says the income limits are “Home Possible Income Limit: $94,080
    100% Area Median Income: $67,200.” My income is $72,000. Are you using the Home Possible income limit or the 100% area income limit? Would I qualify for the 1% down?

  13. I lost my job in May and was rehired in November.
    After my tax return in January 2017, I will have about $3,000 in savings. I would like to buy ASAP, but may want to keep saving until Spring, when inventory might be higher.
    For the 2016 tax year I will be well below the median income in the zip code that I want to buy. This may not be the case for the 2017 year, as my new job pays around $55,000.00. The homes in my area are $150,000 to $250,000. I have a credit score of 760.
    Not sure how many months of actual income I need. I received six months of unemployment. With the recent developments of the (unexpected) Trump election, I am concerned my dream of purchasing a home with a low 1% down payment may go down the drain.
    Any pointers?

    1. Hi Josh:

      Because of the election, so much is unknown at this point that it would be unwise to speculate on how they will affect anything in the housing market. We won’t know really until he takes office. That being said, we can definitely help you look into your options. You can get into contact with us now and we can start to talk through your situation. You can get in touch with one of our Home Loan Experts by filling out this form or calling (888) 728-4702.

      Thanks,
      Kevin Graham

  14. What credit bureau do you use? There is a 27 point difference between Transunion and Eqifax. One is over 680, the other isn’t.

    1. Hi Chris:

      We pull from Equifax, Experian and TransUnion. We use the median credit score. If there’s more than one client on the loan, we use the lowest median score. Hope this helps!

      Thanks,
      Kevin Graham

    1. Hi Steve:

      No, the grant doesn’t have to be repaid. You can ask your home loan expert for confirmation on how long you have to occupy the property for you can move out. You can get in touch with us by filling out this form or calling 888-728-4702.

      Thanks,
      Kevin

        1. Hi Eric:

          I’m going to have someone reach out to go over your personal situation and talk about your options.

          There are many factors that affect qualification for any mortgage, we just tried to list the major ones in the blog post.

          Thanks,
          Kevin

    1. Hi Taylor:

      Loan programs do sometimes come and go. That being said, there are no plans to get rid of this in the near future.

      Thanks,
      Kevin Graham

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