The Conventional 100 Mortgage For First-Time Home Buyers

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.

Conventional 100: Eligibility Requirements For First-Time Home Buyers

The Conventional 100 mortgage requires home buyers to meet several conditions for pre-approval.

1. You must be a first-time home buyer

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.

2. You must occupy the home you’re buying

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.

3. The home must be a 1-unit property

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.

4. Your mortgage loan size must be within local mortgage loan limits

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.

5. Your income may not exceed the area median income by more than 40%

Conventional 100 limits household income to 140% of the area median income (AMI). This includes all sources of income, such as:

• Wage income (full- or part-time)
• Tips, bonuses, and commissions
• Child support, maintenance, and alimony
• Social security payments
• Dividend and investment income

If your household income exceeds the limit, consider other options like the Conventional 97 or the FHA mortgage, which do not have income caps.

6. You must have a 660 credit score or higher

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.

7. You must be a U.S. citizen or permanent resident

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.

8. You must complete an online homeownership education class

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.

9. The home must be in an eligible Conventional 100 location

As of July 11, 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.

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The Conventional 100 Is A Home Affordability Mortgage

The Conventional 100 program helps first-time home buyers achieve homeownership through:

1. No-money-down mortgages
2. Discounted mortgage rates
3. Reduced mortgage insurance premiums

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%.

Compare Conventional 100 to HomeReady & Home Possible

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.

Comparison Table

	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

Alternatives to the Conventional 100 Mortgage Program

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.

1. HomeReady: A 3% down payment option for low- to moderate-income buyers.
2. Home Possible: Similar to HomeReady, with more stringent credit and income standards.
3. Conventional 97: Another 3% down payment mortgage for single-unit homes, ideal for higher credit scores.
4. FHA mortgage: A 3.5% down payment mortgage for those with lower credit scores or buying 2-4 unit homes.
5. USDA mortgage: A 100% mortgage for rural areas with modest income limits.
6. VA mortgage: A 100% mortgage for military veterans and their families.
7. HomePath: A low-down payment option for purchasing foreclosed homes.

First-time buyers may also qualify for federal tax credits or local down payment assistance programs.

Common Questions About The Conventional 100

What is the minimum credit score for Conventional 100?

The Conventional 100 requires a 660 minimum credit score using the FICO system. Non-traditional credit is not allowed.

Does Conventional 100 allow non-occupant co-borrowers?

Yes, buyers can add co-borrowers, such as parents, to assist with the mortgage without them living in the home.

Do I need a signed lease to use income from an ADU?

No, a signed lease is not required, but without one, the rent value might be too low to support your loan qualification.

What is the minimum down payment for Conventional 100?

No down payment is required for the Conventional 100 mortgage.

Is Conventional 100 for first-time home buyers only?

Yes, this program is exclusively for first-time home buyers.

Can I make a down payment using gift funds for a Conventional 100 mortgage?

Yes, gift funds can be used for a down payment, though the program does not require one.

Can I purchase a multi-unit home using Conventional 100?

No, this program is for single-family homes only, including townhomes, condos, and rowhomes.

Can I use the Conventional 100 mortgage for community land trusts?

No, community land trusts are not eligible for this program.

Can I use an adjustable-rate mortgage with Conventional 100?

No, adjustable-rate mortgages are not allowed under this program.

Where do I get Conventional 100 homeownership education and counseling?

You can access free homeownership education through Fannie Mae’s HomeView platform.