According to consumer research conducted by Fannie Mae – and no surprise to real estate professionals – the primary barrier to homeownership for first-time home buyers is the act of saving money for the down payment and for closing costs. Fannie Mae offers low down payment loans and other flexibilities to expand access to credit for creditworthy borrowers and to support sustainable homeownership.
Use of Fannie Mae financing is not required for purchase of a HomePath property – buyers may pay cash or use financing of their choice. Buyers seeking financing should work with their lender to confirm eligibility for any specific loan product or feature.
3% Down Payment. Fannie Mae offers 3% down payment financing to help home buyers who would otherwise qualify for a mortgage but may not have the resources for a larger down payment. This option is designed to help lenders serve creditworthy borrowers. Product choices include a standard product or MyCommunityMortgage®, which features minimum mortgage insurance coverage with no additional loan-level price adjustment.
Flexible Sources of Funds. A Fannie Mae loan generally does not require any minimum contribution from the borrower’s own funds on one-unit properties to be occupied by the borrower (including condos and PUDs). Gift or grant funds may be used for all or part of the down payment and closing costs.
- Parents want to help their children purchase a first home?
- No problem, as long as a gift letter is provided and other applicable requirements are met.
- Funds can be a gift from the borrower’s spouse, child, or other dependent, or any other individual who is related to the borrower by blood, marriage, adoption, or legal guardianship; or a fiancé, fiancée, or domestic partner.
*The donor may not be, or have any affiliation with, the builder, developer, real estate agent, or any other interested party to the transaction.
- Other sources of funds that are allowed to cover the down payment and closing costs include:
- Employer assistance
- A gift or grant from an organization such as a church, municipality, nonprofit organization (excluding credit unions), and public agencies.
Borrower profiles. With our lenders and other partners, Fannie Mae is helping hard-working people with modest incomes overcome typical financial challenges to become first-time homeowners. View borrower profiles