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Fannie Mae 97% Conventional Mortgage Loan is Back

John Thomas December 14, 2014 Tags: , , ,
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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.

The 97% mortgage loan program is available through the My Community Mortgage Product from Fannie Mae and for a standard non-MCM Conventional Loan Product.  The highlights of the program for both programs are as follows:

  • Maximum loan to value (LTV), Combined Loan to Value (CLTV), and High or Home Equity Combined Loan to Value (HCLTV) is 97%.
  • DU Underwriting required
  • 1 Unit Principle Residence Only (Including Condos & PUDs)
  • Manufactured Homes are Not Eligible for 97% LTV Loans
  • Must be a Fixed Rate Mortgage (No ARMS)
  • Gifts may be used for down payment and for Reserves


A First Time Home Buyer is defined by Fannie Mae as a person who has NOT owned ANY residential property in the last 3 years which includes primary residence, second home, and or investment properties.

In order to be eligible to Refinance using the 97% LTV mortgage loan program the current mortgage being refinanced must be owned by Fannie.

So commonly asked questions about the Fannie Mae 97% Conventional Mortgage Loan are as follows:

What are the down payment requirements on a 97% Conventional Loan?

The down payment requirement is 3% of the purchase price.  For example, if purchasing a home for $200,000, then the 3% down payment from the borrower is $6,000.  Compared to previous 5% down program at $10,000,  this is a much cheaper option for potential first time home buyers.

What is the maximum loan size for  Fannie Mae 97% Conventional Loan?

The maximum loan amount for Delaware is $417,000 for a 97% Conventional Mortgage Loan.  This would mean that the maximum purchase price at 3% down is $430,000.

If you would like to apply for a 97% Conventional Mortgage Loan to purchase or refinance a home in Delaware, please call 302-703-0727 or APPLY ONLINE

John R. Thomas
Certified Mortgage Planner – NMLS 38783
Primary Residential Mortgage, Inc.
248 E Chestnut Hill Rd
Newark, DE 19713
302-703-0727 DE Office
410-412-3319 MD Office
610-906-3109 PA Office


About John Thomas

John Thomas and his team are long-time Delaware natives. They know the local real estate market as well as they know the loan products that help them serve it.

Dedicated to helping first-time buyers; the John Thomas Team are experts on first-time buyer loan programs (FHA, VA, USDA) and conduct monthly first-time buyer seminars that have been attended by more than 3000 Delaware buyers.

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