1. Home
  2. Blog
  3. Home Buying/Selling
  4. Small Down Payment? Low Equity? Here Are Some New Loan Options for You
Setting the Right Expectations for House Hunting - Quicken Loans Zing BlogFannie Mae has made a new loan option available for first-time home buyers who don’t have a lot of money for a down payment. If you have limited equity in your home, there’s also a new refinance option if you’re looking to lower your rate or shorten your term.

If you fall into either of these categories, read on for details.


Low Down Payment Options for First-Time Buyers

Let’s start by giving you the lowdown on a new low down payment loan for first-time home buyers.

Under a new program from Fannie Mae, first-time home buyers can now qualify for a mortgage with a loan-to-value ratio (LTV) between 95% and 97%. This means you can now purchase a home with as little as 3% down. This applies to conventional loans with terms between eight and 30 years.

There are a couple of restrictions on qualification:

  • The home must be a single-family unit.
  • At least one client on the loan must be a first-time home buyer.
  • You can’t have had an ownership interest in a residential property within three years prior to the date of purchase.

Next to VA loans, which aren’t available to everyone, the new program may represent the most compelling option for first-time home buyers not looking to bring a large sum to the closing table.

If this sounds good to you, you might get started by checking out our First-Time Home Buyer’s Guide.


The new program also enables refinances of between 95% and 97% LTV when the loan being refinanced is owned by Fannie Mae. It’s also only for clients who don’t qualify for a HARP refinance.

This could enable clients with limited equity in their homes to refinance and jump into a lower rate with a shorter term.

In order to qualify, your loan must be owned by Fannie Mae. If you’re not sure whether Fannie Mae owns your loan, a Home Loan Expert can check this for you, or you can check here.

Do either of these options appeal to you? Where do you want to purchase a house? What will you do with the money you save by refinancing? Leave us a note in the comments.

This Post Has 19 Comments

  1. I have heard first time home buyers could mean it’s been years since you bought a house. Can you be considered a first time buyer if it has been years since you have owned and if so, how many?

    1. Hi Hope:

      In general, you have to be buying a primary property and you can’t have had an interest in a residential property in the last three years preceding application. Hope this helps!

      Kevin Graham

  2. My husband and I are looking to buy a home. We’re first time buyers, Can someone contact me *********

    1. I’m going to hide your phone number for your own privacy. We will need a bit more information from you, specifically the state you’re looking to buy in. Then we can have a mortgage banker that’s licensed in that state give you a call. Probably the easiest way to do this is to have you fill out this form. Thanks for thinking of us!

      Kevin Graham

    1. Good morning, Kimberly. Currently, the only type of loan that allows a $0 down payment is a VA loan, which is a benefit offered to veterans. However, if you’re looking to save up for a down payment, check out this article. It’s a good place to start!

  3. I am a real estate agent and need all the information I can get on first time home buyers. How much does this loan help? Thank you

  4. Hi I want to buy a house thru fha. The house im looking for its around 300,000 my salary is 69,000 but my monthly debts are 1700. Is it possible for me to get approved. My credit its in the 690 I have no co-signer.

  5. HI, I have a question on PMI. I am looking for a single family home and could only put down around 10%. from what i know i need to put at least 20% down to avoid PMI. i also saw that the PMI has decreased effective 01/26/2015. thanks

  6. I am looking at a home owned by Fannie Mae it’s a foreclosure I really want this home I am a first time home buyer my credit score is very poor I have a full time job and I have 5000 I can put down is there any way I can get a loan for first time home buyer regardless of my credit please help I really want this house it’s a $39000 house and I can afford to make the payments thanks

    1. Hi Corey! Thanks for reaching out. I’ve passed your comment on to our team of mortgage experts who will reach out to you shortly to discuss next steps.

Leave a Reply to Jennifer Cancel comment reply

Your email address will not be published. Required fields are marked *