A small down payment is possible with the Conventional 97 loan. The loan application requirements for those looking to get into a home with only a small down payment are really the same as any other home loan. The Conventional 97 program requires the basic items such as pay-stubs, W-2s, tax returns, and bank statements. There is no home buyer counseling required. Please also keep in mind that this option is only good for fixed rate mortgages, but feel free to choose from a 15 or 30 year loan duration for your small down payment loan.
There is also a credit score requirement. Applicants must have a credit score of 680 or better to be eligible for this program. If borrowers will be using a gift for any part of their down payment, then a credit score of 740 is required. The only exception is if the gift is helping with closing costs and the buyers are bringing 3% of their own money for the down payment, then a credit score of 680 is needed. Gifts may only come from relatives. Examples of such relatives are parents, children or other blood relatives, adopted members of the family, a fiancée, or domestic partner. Between your funds and perhaps a little help from a family member, obtaining a home loan with a small down payment can make your dreams of home ownership a reality.
Read more in the first part of this series, by clicking here.
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[…] Mortgage rates are often comparable to an FHA loan, but the Conventional 97 program does not require you to pay the mortgage insurance up front and the insurance is generally cheaper. The Conventional 97 program could also be used as a refinance option for your Long Beach home loan. […]