The Conventional 100 Mortgage is a no-money down payment assistance program for US home buyers. It is available to first time home buyers in partnership with Homebuyer.com.
Conventional 100 offers access to 100% financing, low mortgage insurance rates, and generous approval standards. It’s also a true mortgage – the traditional 100 is neither a cash grant, nor a first-time home buyer tax credit, nor a $25,000 downpayment bill awaiting approval like the Toward Equity Act.
Tenants can use the Conventional 100 to buy their first home faster with less out-of-pocket money.
This article reviews the Homebuyer.com Conventional 100% mortgage program and how you can apply to buy your first home with no money down.
Click here to start your approval.
Traditional 100: Eligibility Requirements for First Time Home Buyers
Homebuyer.com Conventional 100 mortgages require home buyers to meet up to nine requirements for their mortgage pre-approval.
1. You must be a first time home buyer
The Conventional 100 is a home affordability mortgage for first-time home buyers, which includes all buyers who have not owned a home in the three years prior to closing. Displaced housewives and single parents with no prior ownership other than the spouse are also eligible as first time home buyers.
2. You must be in possession of the house you are buying
The traditional 100% mortgage is for primary residences only. Buyers cannot use the traditional 100 to purchase a vacation home, short-term rental, or other investment property type.
Co-signers are allowed with a traditional 100% mortgage, and at least one person must move into the property within 60 days of settlement on the mortgage application.
3. The house must be a 1-unit property
The traditional 100% mortgage is for single-unit homes only. Tenants can use the traditional 100 to purchase a detached single-family home or an attached single-family home which includes townhomes, condos and rowhomes.
Homes in planned neighborhoods with a homeowners association are permitted under the traditional 100 guidelines, as well as single-family homes with an appropriately zoned auxiliary dwelling unit (ADU).
Multi-unit homes, manufactured homes, mobile homes and cooperative properties are ineligible.
4. Your mortgage loan size must be within local mortgage loan limits
The Traditional 100% mortgage is built on traditional mortgage guidelines, which include county-specific loan size limits. The traditional 100% loan size must fall within your local conforming mortgage loan limit.
5. Your income cannot exceed the median income of the area by more than 40%
The traditional 100% mortgage program limits the home buyer’s household income to 140 percent of the area median income (AMI). All sources of household income are considered under the program, including:
- Full and part-time salary income from one or multiple jobs
- Tips, Bonus and Commission
- child support, alimony and alimony payments
- social security payments
- dividend payments and other investment income
Home buyers whose household income exceeds the traditional 100% maximum can consider other low and no down mortgages, such as the traditional 97 mortgage and the FHA 3.5% down payment mortgage, which do not impose household income maximums.
6. Your credit score must be 660 or higher
The traditional 100% mortgage requires home buyers to have a 660 credit score or higher.
The program relies on the FICO credit scoring system, which ignores medical debt and collections. Non-traditional credit sources such as rental payment history and utility payments are not considered.
Home buyers whose credit ratings fail to meet the traditional 100 standards should consider an FHA mortgage or another low-downpayment mortgage with more forgiving credit score standards for first-time home buyers.
7. You must be a US citizen or permanent resident alien
The Traditional 100 Mortgage Program is limited to US citizens and lawful United States residents, including permanent resident aliens and non-permanent eligible aliens. The program also allows trust closure for trusts where beneficiaries meet program residency standards.
Closure is not allowed in an LLC.
8. You must complete an online home ownership education class
First-time home buyers must complete a certified home ownership education course in order to be approved for their conventional 100% mortgage.
Two popular homeowner education courses are Fannie Mae’s HomeView and Freddie Mac’s Credit Smart. Both are free, online options. Many buyers complete their online education class in 2 hours or less.
9. The house should be ranked in the LOL Traditional 100
As of July 13, 2023, Conventional 100 is available in thirty states. Homes in other states and properties in any territory, province or commonwealth outside the United States, including Puerto Rico, Guam and the Virgin Islands, are ineligible.
Home buyers in non-eligible states should consider different low and no downpayment programs for first-time buyers, including 100% USDA mortgages and VA mortgages.
Traditional 100 is a Home Affordability Mortgage
Conventional 100 is a home affordability mortgage program for first time home buyers.
Mortgages make the American dream of home ownership more attainable through a combination of the following:
- no money mortgage
- discounted mortgage rates
- Discount on mortgage insurance premium.
The no-money-down portion of the traditional 100 is accomplished using two mortgage liens—one for 97 percent of the home purchase price and the other for the remaining three percent of the purchase price plus an additional one percent for closing costs. .
The program also offers discounted mortgage rates.
Through July 13, 2023, the conventional 100% mortgage rate discount is credit-score based. Buyers with low-rated credit scores receive an interest rate discount of 0.25 percentage points on a comparable 30-year fixed-rate mortgage, and buyers with high-rated credit scores receive a discount of 0.75 percentage points.
Finally, the traditional 100 offers discounted private mortgage insurance (PMI) rates.
Eligible home buyers save up to $700 per $100,000 borrowed annually, and PMI is eliminated when home equity reaches 20 percent.
For today’s mortgage rates, get pre-approved.
Is it possible to compare the traditional 100 with HomeReady and Home?
The Conventional 100 is a first-time home buyer loan based on traditional 30-year fixed-rate mortgage guidelines. It is similar to Fannie Mae and Freddie Mac’s HomeReady and Home Possible programs, respectively, with a few key differences.
The most notable difference between Conventional 100 and the HomeReady and Home Possible programs is that Conventional 100 does not require buyers to make a down payment. It also lets buyers finance up to four per cent of the purchase price towards closing costs and settlement charges.
Click to get 100% conventional mortgage approval.
Alternatives to the Traditional 100% Mortgage Program
The Conventional 100 is a zero-down mortgage for first-time buyers. However, not all first time home buyers will be eligible.
The Traditional 100 requires tenants to meet program guidelines with checklist items such as:
- household income eligibility
- credit score minimum
- occupancy standard
It also places standards on subject properties, including home type and location.
If the conventional 100 isn’t available to you, here are other low and no down payment mortgage options available for first time home buyers:
- HomeReady: 3% down payment mortgage program backed by Fannie Mae. HomeReady is ideal for home buyers with low or moderate income and average or below average credit scores.
- Homes Possible: 3% down payment mortgage program backed by Freddie Mac. Home Possible is similar to HomeReady but applies different credit score and household income standards.
- Traditional 97: 3% down payment mortgages for single-unit homes backed by Fannie Mae and Freddie Mac. The traditional 97 is often best for buyers with above-average credit scores and household incomes.
- FHA mortgage: 3.5% down payment mortgage backed by the Federal Housing Administration. FHA mortgages work well for buyers with low credit scores and for buyers who want to purchase multi-unit homes.
- USDA Mortgage: 100% mortgage backed by the US Department of Agriculture. USDA mortgages are available to buyers with modest incomes and average credit scores in low-density areas.
- VA Mortgage: 100% mortgage backed by the Department of Veterans Affairs. VA loans are available to active military members, veterans and their surviving spouses. Average credit score required.
- HomePath: A low down payment program by Fannie Mae for buyers interested in foreclosure and repossessing homes.
First-time buyers may also qualify for the federal home buyer tax credit and local down payment assistance. Get pre-approved to check your eligibility.
Traditional 100 FAQ
How do I apply for a conventional 100% mortgage?
Apply for a conventional 100% mortgage on the Homebuyer.com mortgage site.
What is the minimum credit score for conventional 100?
Requires a minimum credit score of 660 using the FICO scoring system for a traditional 100. Alternate tradelines are not allowed.
Does Conventional 100 allow non-occupier co-borrowers?
Yes, home buyers can add other people to their traditional 100% mortgage application, such as parents or relatives, who are able to assist financially with the mortgage but will not live in the home.
Do I need a signed lease to use the income from the ADU?
No, signed leases are not required to claim income from ADUs. However, without a signed lease, the assigned rental value may be too low to qualify for your loan.
What is the minimum down payment for Conventional 100?
There is no down payment required for a traditional 100% mortgage.
Is Conventional 100 only for first time home buyers?
Yes, the traditional 100% mortgage is only available to first time home buyers.
Can I make a downpayment for a conventional 100% mortgage using gift funds?
Yes, the conventional 100% mortgage guidelines allow a cash gift for the down payment.
Can I buy a multi-unit home using Conventional 100?
No, the Traditional 100 is for single-family homes, which includes detached homes, condominiums, townhomes and rowhomes.
Can I Use a Conventional 100 Mortgage for Community Land Trusts?
No, community land trusts are ineligible for the traditional 100% mortgage program.
Can I Use an Adjustable-Rate Mortgage With Conventional 100?
No, adjustable rate mortgages are not available for traditional 100% home loans.
Where Can I Find Traditional 100 Home Ownership Education And Consulting?
Fannie Mae offers free, qualified homeowner education through its HomeView website.
What are the conventional 100 mortgage rates today?
Conventional 100% mortgage rates are available as part of 3 minute pre-approvals. Get your mortgage rate quote now.
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