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3% Down Conventional Is Back

Conventional Lenders are again financing purchases with only 3% down (the option was not available for about a year). The maximum loan amount is $417,000. For loan amounts from $417,000 to $625,500, borrowers still need to put down 10%.

The 3% down option is better this time around b/c the down payment and reserves can be 100% gift funds.

Conventional 3% down financing is better than FHA financing for these reasons: (1) The down payment is smaller; (2) the Monthly Mortgage Insurance premium is lower; (3) there is NO Up Front Mortgage Insurance; and (4) the Mortgage Insurance is NOT permanent.

The drawbacks to 3% conventional financing: (1) the rates are higher; (2) it is harder to qualify for than FHA.

Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646