Fannie Mae 97% Conventional Mortgage Loan is back for qualified first time home buyers as announced by Fannie Mae on December 8, 2014. 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 homeowners 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 for 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.