Unlock Homeownership with Just 1% Down: The Conventional 1% Down Loan Program

Buying a home may feel out of reach for many due to steep down payment requirements—but a new solution is changing that. The Conventional 1% Down loan program is back, and it's making homeownership more accessible than ever. Whether you’re a first-time buyer or not, this lender-paid down payment assistance initiative opens the door to homeownership with as little as 1% down.

What Is the Conventional 1% Down Program?

This innovative program is a purchase-only loan option that allows eligible borrowers to contribute just 1% toward the down payment on a home. The remaining 2% is provided as a true grant by the lender (up to $7,000), bringing the total down payment to the required 3%—with no repayment and no second lien.

Key Program Features

30-year fixed-rate mortgages
For primary residence purchases only
Loan amounts up to conforming loan limits
Requires a minimum 620 FICO score
Must meet 97% Loan-to-Value (LTV) criteria

Who Is Eligible?

To qualify for this program, borrowers must:

Earn 80% or less of the Area Median Income (AMI)
Complete homeownership education if a first-time buyer
Receive DU or LPA Accept/Eligible findings
Originate the loan through the Broker Channel (not available for correspondent loans)

Additional Program Rules

Not eligible for 2-4 unit or manufactured homes
No TRAC eligibility
90-day lock maximum
No Control Your Price bps
Temporary rate buydowns allowed

VLIP Credit for Lower-Income Borrowers

If you're a first-time homebuyer earning 50% or less of the AMI, you may qualify for a $2,500 pricing incentive, which stacks on top of the 2% lender-paid down payment. This $2,500 is guaranteed—regardless of the property’s price point.

Why This Program Stands Out

✅ Only 1% down from the borrower
✅ No geographic restrictions
✅ No repayment on the 2% grant
✅ No second lien
✅ Helps buyers reserve cash for other essentials like:

Furniture
Repairs
Moving costs
Interest rate buydowns

Who Benefits the Most?

First-time homebuyers with limited savings
Low- to moderate-income earners
Buyers seeking competitive loan options through brokers

Final Thoughts

The Conventional 1% Down loan is a true game-changer. By reducing upfront costs and offering generous grant support, it paves a smoother, more affordable path to homeownership. If you're earning 80% or less of the AMI, this could be the opportunity you've been waiting for.

Ready to find out if you qualify? Let’s connect and make your homeownership dream a reality.

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FAQ

❓1. How does the Conventional 1% Down Loan Program work?

‍This program allows eligible borrowers to contribute just 1% toward the down payment, while the lender covers the remaining 2% as a grant (up to $7,000). That makes up the 3% down payment typically required for a conventional loan—with no repayment required and no second lien. It's designed for primary residences only.

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❓2. Who qualifies for the 1% Down Program?

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To be eligible, you must:

Earn 80% or less of the Area Median Income (AMI)
Have a minimum 620 FICO score
Get approved through DU or LPA (Accept/Eligible)
Be purchasing a primary residence (no second homes, no manufactured or 2–4 unit homes)
Complete homebuyer education if you’re a first-time buyer

Bonus: First-time buyers earning 50% or less of the AMI may also qualify for an additional $2,500 credit!

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3. What makes this loan option so helpful for first-time buyers?

‍This program removes one of the biggest hurdles: the hefty down payment. With only 1% required from the buyer and no repayment of the grant, it allows you to keep more cash in your pocket—for moving expenses, home repairs, furniture, or even buying down your interest rate. Plus, there are no geographic restrictions, making it more accessible across the board.