New programs have started to sprout up, including the brand-new 1% down payment program for home buyers. For many of these programs, there are minimum requirements borrowers must meet in order to qualify.
First and foremost, the 1% down option requires you to be a first-time homebuyer. A first-time homebuyer is anyone who hasn’t purchased a home before, or anyone who hasn’t purchased a home within the last three years. Additionally, the home that is being purchased must be a primary residence, meaning that you may not be eligible for the 1% down payment program for a refinance or for a second home.
Secondly, the borrower must have a certain credit score. For the 1% down option, your credit score needs to be at a minimum of 700. Another financial qualification that may be used is your debt-to-income ratio, which can’t exceed 43% in most cases.
So, how does the 1% down payment program work?
The borrower puts down 1% of the property’s purchase price. The lender will contribute an additional 2% for the down payment. This puts the buyer in a position to have 3% equity in the property at the time of closing.
Find out if you qualify for the 1% down program today here.