Have you heard about the 1% down loan offered by Rocket Mortgage? Well, it’s available! It may be a little prohibitive in California considering real estate prices are higher than the national average, but there may be pockets where it’s possible.
The loan program is called the ONE+ By Rocket Mortgage®, which is a 1% down payment loan and the lender itself will provide the additional 2% down. This is a Fannie Mae loan, which does require a minimum 3% down payment: 1% comes from you and 2% from Rocket. The 2% is a grant with no interest and no obligation of repayment. The loan also does not carry any monthly Mortgage Insurance. To qualify for this loan program, here are the base requirements, with the two major requirements (in my opinion) listed first:
- Your income must be at or below 80% of the Area Median Income for your county. Check the limits here: https://ami-lookup-tool.fanniemae.com/amilookuptool/
- Max loan amount is $350k, so working backwards with the 1% contribution + 2% grant, this would cap you at a max purchase price of $360,825
- 1% contribution by you is required (gift funds from family are acceptable)
- There is no monthly Mortgage Insurance (MI); only “Lender Paid Mortgage Insurance,” so the MI is built into the interest rate
- You do not need to be a first time homebuyer
- You must occupy the home as your primary residence
- Property must be 1-unit only: single-family home, condo or townhouse
As mentioned, the max loan amount does make it a little more prohibitive with California real estate prices, but not impossible depending on the area you are looking to purchase your home in. There are other low down payment options available by other lenders, which I will be reviewing in future blog posts. Contact me with any questions!