Fannie Mae 97% Conventional Mortgage Loan is back for qualified first time home buyers as announced by Fannie Mae on December 8, 2014. The this new loan option for qualified first time homebuyers that will allow for a down payment as low as three percent or for limited cash out refinance of home owners who currently have a Fannie Mae loan. The lower down payment is to help qualified borrowers to access credit that may not have the resources fro a larger down payment.
These 97% Conventional loans do require mortgage insurance as the borrower is financing more than 80% of the value of the home. The mortgage insurance can be paid on a monthly basis or paid as a one time single premium at closing.