View All Learning Articles
Is April 2024 a Good Time to Buy a Home?
The 100% HELPER Act Mortgage
The $25,000 Downpayment Toward Equity Cash Grant
The Biden $15,000 First-Time Homebuyer Tax Credit
$10,000 First-Time Home Buyer Mortgage Relief Credit
14 Grants & Programs for First-Time Home Buyers
View All Research Articles
170+ Mortgage Statistics
Generational Home Buyer Statistics
Annual HMDA Home Buyer Study
Most Popular Places for Vacation Homes In Every State
Gen Z Home Buyer Distribution By Location
Younger Millennial Home Buyer Distribution By Location
Older Millennial Home Buyer Distribution By Location
ZIP Code Invasions: Gen Z
ZIP Code Invasions: Younger Millennials
ZIP Code Invasions: Older Millennials
Dan Green
Since 2003, Dan Green has been a leading mortgage lender and respected industry authority. His unwavering commitment to first-time home buyers and home buyer education has established him as a trusted voice among his colleagues, his peers, and the media. Dan founded Homebuyer.com to expand the American Dream of Homeownership to all who want it. Read more about Dan Green.
How We Make Money
Homebuyer.com is your trusted guide to homeownership. Since 2003, our team has offered real-world expertise and advice to tens of millions of U.S. home buyers. Our content stands on its integrity: it's factual, unbiased, and free from outside influences. Read our editorial guidelines.
Homebuyer.com is a mortgage-company-affiliated publisher. We earn compensation when you click specific links on the website, or apply for a mortgage with Homebuyer.com or a partner listed in our comparison tables. Our partners compensate us differently, so we randomize our tables to protect our readers from steering. We may also earn compensation for advertisements on the site, which are indicated clearly. Note that limitations in our software, whether we originate mortgages in your area, and credit factors may affect the offers and comparison tables you see on various parts of this site. We do not include offers for every mortgage product available. Someday, we hope we will.
Trusted Content
This article was checked for accuracy as of January 19, 2024. Homebuyer.com ensures every piece of information we share reflects the latest in mortgage standards. Learn more about our commitments in our editorial guidelines.
Conventional 97 is the generic name for Fannie Mae’s and Freddie Mac’s three percent down, 30-year fixed rate mortgage loan for first-time home buyers.
The name describes the mortgage.
Conventional 97 is a conventional mortgage loan that allows up to 97 loan-to-value (LTV). It’s the counterpart to HomeReady and HomePossible, which also allow three percent down but which Fannie Mae and Freddie Mac reserve for low- and moderate-income households. There are no income limitations with Conventional 97.
Conventional 97 is sometimes called 97% LTV Standard.
The Conventional 97 is Fannie Mae’s and Freddie Mac’s mortgage with the smallest allowable down payment. It’s the default mortgage choice for many first-time buyers. A separate application is not required.
Here are the requirements to use Conventional 97 to buy a home:
Conventional 97 is for first-time home buyers. At least one person on the mortgage application must be a first-time buyer. Fannie Mae and Freddie Mac define first-time home buyer as a person who has not owned a percentage of any residential property in the last 36 months.
Conventional 97 requires that buyers make a three percent down payment, which may come from any eligible source. Eligible sources include savings, government down payment assistance programs, cash gifts from family or friends, cash grants, and loans.
Conventional 97 is for primary residences only. The program cannot be used to purchase a second home, a short-term rental property, or an investment property of any kind.
Conventional 97 is for single-family residences which includes townhomes, condominiums, and rowhomes. Manufactured homes may be eligible. Homes with 2 or more units and commercial properties are ineligible.
Conventional 97 is a conforming mortgage program, meaning buyers and their applications must fall within conforming mortgage standards. Loan sizes may not exceed local conforming mortgage loan limits, buyers must provide proof of income and evidence of down payment, and loans may not be interest-only.
Conventional 97 requires a minimum credit score of 620. Fannie Mae and Freddie Mac use the FICO credit scoring system, which ignores medical debt and collections.
Fannie Mae requires that first-time home buyers complete a homeownership education course prior to closing. Fannie Mae makes an online educational course available at no cost which satisfies the requirement. Homeownership education reduces mortgage default risk.
Conventional 97 is the catch-all conventional mortgage for low-down payment buyers. Similar to the FHA mortgage, it’s available in all 50 states and to home buyers of all income levels.
Conventional 97 | Home Possible | HomeReady | FHA | |
Min. Down Payment | 3% | 3% | 3% | 3.5% |
Min. Credit Score | 620 | 660 | 620 | 580 |
First-Time Buyers | Yes | Yes | Yes | Yes |
Income Limitations | None | Yes | Yes | None |
Boarder Income | Allowed | Not Allowed | Allowed | Allowed |
ADU Income | Not Allowed | Not Allowed | Allowed | Not Allowed |
PMI Discounts | No | Yes | Yes | No |
Homeownership Education | Required | Required | Required | Not Required |
Single-Family Homes | Allowed | Allowed | Allowed | Allowed |
Multi-Unit Homes | Not Allowed | Allowed | Allowed | Allowed |
Occupancy Rules | Main Residence | Main Residence | Main Residence | Main Residence |
The Standard 97 LTV is one of seven government-backed, low down payment mortgage loans. It’s a lower-cost alternative to FHA-backed mortgages for first-time buyers with good income and better-than-average credit scores.
However, the Conventional 97 isn’t the best mortgage choice for everyone.
If you decide that the Conventional 97 mortgage won’t meet your needs, here are other home mortgage options for first-time home buyers:
First-time home buyers may also be eligible for home buyer tax credits and local down payment assistance from their state.
Get pre-approved to check your eligibility.
Conventional 97 is a purchase mortgage program for first-time home buyers. At least one mortgage applicant must be a first-time buyer.
Home buyers must have a mortgage credit score of at least 620 to use the Conventional 97 loan. Buyers without a credit score may also qualify.
No, Conventional 97 is a conventional mortgage loan which means it’s backed by Fannie Mae or Freddie Mac. FHA mortgages are backed by the Federal Housing Administration.
No, Conventional 97 is not a home affordability mortgage like HomeReady and Home Possible, Conventional 97 doesn’t discount mortgage rates for home buyers, and doesn’t offer reduced mortgage insurance rates.
Unlike HomeReady and Home Possible, Conventional 97 doesn’t limit who qualifies based on income. All first-time home buyers may be eligible.
There’s no difference between the Conventional 97 and Standard 97 LTV mortgages. They are the same. Conventional 97 is a branded name for the standard mortgage product.
Yes, home buyers can make a down payment of more than 3 percent with the Conventional 97 loan. However, once a buyer increases its down payment to five percent, standard mortgage financing applies and the Conventional 97 isn’t needed.
Yes, the Conventional 97 is available from every mortgage lender that offers conventional mortgage financing.
Yes, the Conventional 97 mortgage is available to all home buyers, irrespective of income. Low- and moderate-income households are eligible and high-income earnings are eligible, too.
Yes, Conventional 97 is for first-time home buyers only. Repeat buyers may use other low down payment mortgage loans including HomeReady, Home Possible, FHA, USDA, or VA.
Conventional 97 is not better or worse than an FHA-backed mortgage but it may be a better or worse option for your personal situation. See which low down payment is best for your needs.
Wave goodbye to waiting times and say hello to our Immediate Mortgage Approval. It's more than just a mortgage - it's your ticket to home-buying freedom, available anytime you are. With ultra-low rates at your fingertips, the power to secure your future is just a click away. Why wait for office hours? Your home doesn't.
Recent Mortgage News
WOW Inflation Is Hotter – April 25, 2024
New Construction Homes On Overstock? – April 24, 2024
Home Buyers Have 7% Less Power This Month – April 23, 2024
What On Earth Day Is Going On With Mortgage Rates? – April 22, 2024
First-Time Buyers Getting Lower Mortgage Rates – April 21, 2024
What is a Starter Home?
Conventional 97 is the generic name for Fannie Mae’s and Freddie Mac’s three percent down, 30-year fixed rate mortgage loan for first-time home buyers. The name describes the mortgage. Conventional 97 is a conventional mortgage loan that allows up to 97 loan-to-value (LTV). It’s the counterpart to HomeReady and HomePossible, which also allow three percent […]
Be a better buyer. Subscribe now and never miss out on exclusive insights, new market trends, and first-time buyer programs.
Finding your dream starts here. Apply in minutes.
About
Learn
Research