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Updated: October 2, 2024
The Conventional 100 mortgage is a program offering down payment assistance with no required initial cash payment for U.S. home buyers.
The Conventional 100 offers 100% financing, reduced mortgage insurance rates, and flexible approval standards. Unlike other programs such as the first-time home buyer tax credit and the $25,000 Downpayment Toward Equity Act, which are pending Congressional approval, this mortgage is available now.
Renters can use the Conventional 100 to purchase their first home more quickly, without needing significant savings.
This article reviews the Conventional 100 mortgage program and outlines how you can apply to buy your first home with no down payment required.
The Conventional 100 mortgage requires home buyers to meet several conditions for pre-approval.
The Conventional 100 is for first-time home buyers, which includes individuals who have not owned a home in the three years prior to closing. Displaced homemakers and single parents who only owned property as a spouse may also qualify as first-time home buyers.
The Conventional 100 mortgage is limited to primary residences. Buyers cannot use it to purchase vacation homes, short-term rentals, or other investment properties.
Co-signers are permitted, but at least one borrower must occupy the home within 60 days of closing.
The Conventional 100 mortgage applies to one-unit properties, including detached single-family homes, townhomes, condos, and rowhomes. Homes in neighborhoods governed by a homeowners association (HOA) and homes with an accessory dwelling unit (ADU) – a smaller, secondary home on the same lot as the main residence, like a basement apartment or separate cottage – are also eligible.
Multi-unit homes, manufactured homes, mobile homes, and co-op properties are not eligible.
The Conventional 100 is subject to local loan limits based on conventional mortgage guidelines. Loan amounts must conform to the limits set for your area. Check local loan limits.
Conventional 100 limits household income to 140% of the area median income (AMI). This includes all sources of income, such as:
If your household income exceeds the limit, consider other options like the Conventional 97 or the FHA mortgage, which do not have income caps.
The Conventional 100 requires a minimum 660 credit score. The FICO system is used, which ignores medical debt. Non-traditional credit sources like rent and utility payments are not considered.
If your credit score does not meet the requirement, an FHA or low-downpayment mortgage may be better suited.
The Conventional 100 is available to U.S. citizens, permanent residents, and certain other lawful residents. Closing in the name of a trust is allowed if beneficiaries meet these requirements. However, closing in an LLC is not permitted.
First-time buyers must complete a certified homeownership education course. Popular options include Fannie Mae’s HomeView and Freddie Mac’s Credit Smart, both of which are free and online.
As of January 4, 2025, the Conventional 100 is available in thirty states. Homes in U.S. Territories such as Puerto Rico, Guam, and the Virgin Islands, as well as other states, are not eligible.
If your home is in an ineligible area, consider other no-downpayment options such as the USDA mortgage or VA loan programs.
Check your eligibility and begin your application now.
The Conventional 100 program helps first-time home buyers achieve homeownership through:
The no-money-down component uses two liens: one for 97% of the purchase price and another for the remaining 3% plus closing costs.
Interest rates are discounted based on credit score, with up to 0.75 percentage point savings for high credit scores.
Eligible buyers also receive reduced private mortgage insurance (PMI) premiums, with savings of up to $700 per $100,000 borrowed. PMI is removed once home equity reaches 20%.
The Conventional 100 is similar to Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs, but with some differences. The key distinction is that the Conventional 100 requires no down payment and allows up to 4% of the purchase price to be financed for closing costs.
Conventional 100 | HomeReady | Home Possible | |
Down Payment | 0% | 3% | 3% |
Minimum FICO | 660 | 620 | 660 |
First-Time Buyers | Yes | Yes | Yes |
Income Limits | Yes | Yes | Yes |
Boarder Income | Allowed | Allowed | Not Allowed |
ADU Income | Allowed | Allowed | Not Allowed |
PMI Discounts | Yes | Yes | Yes |
Geographic Limits | Yes | No | No |
Closing Cost Credit | Yes | No | No |
Homebuyer Education | Required | Required | Required |
The Conventional 100 is a no-money-down option, but some buyers may not qualify based on income, credit score, or location. Fortunately, there are other options.
First-time buyers may also qualify for federal tax credits or local down payment assistance programs.
The Conventional 100 requires a 660 minimum credit score using the FICO system. Non-traditional credit is not allowed.
Yes, buyers can add co-borrowers, such as parents, to assist with the mortgage without them living in the home.
No, a signed lease is not required, but without one, the rent value might be too low to support your loan qualification.
No down payment is required for the Conventional 100 mortgage.
Yes, this program is exclusively for first-time home buyers.
Yes, gift funds can be used for a down payment, though the program does not require one.
No, this program is for single-family homes only, including townhomes, condos, and rowhomes.
No, community land trusts are not eligible for this program.
No, adjustable-rate mortgages are not allowed under this program.
You can access free homeownership education through Fannie Mae’s HomeView platform.
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