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In an effort to provide as many options as possible to potential homeowners, Quicken Loans has collaborated with Freddie Mac to provide a purchase mortgage loan that only requires a 1% down payment.

 

Here is yet another example of why you should shop around to find the best mortgage loan to suit your financial situation.  Mega banks such as Bank of America and JPMorgan Chase have only recently been able to offer loans with a 3% down payment.  Quicken Loans’ 1% down mortgage is 66% lower.  

The program was spawned out of the partnership between Quicken and Freddie Mac that was announced in October 2015.  The executive vice president of Freddie Mac’s single-family division, Dave Lowman, remarked that the partnership was designed to feature co-developed products to meet the needs of emerging markets, including Millennials, first-time homebuyers, and middle-class borrowers.

The 1% down mortgage is structured to be part of Freddie Mac’s Home Possible Advantage Program, which launched in December 2014, and requires a 3% down payment.  So how does Quicken Loans offer a 1% down payment?  The lender offers a 2% grant to the borrower, effectively creating 3% in equity.

But the 1% down program isn’t for everyone; there are strict qualifications.  This loan is only made available for a purchase mortgage, not refinancing, and can only be used on a single-family home or condo, not a second home, investment property, or co-op.  Additionally, borrowers must have a FICO score of 680 or above, must earn less than the median income for their county, and carry a debt-to-income ratio (DTI) of 45% or less.

If the obstacle preventing you from homeownership is little cash on hand, this may be an option for you. 

 

Find out more about Quicken Loans 1% down mortgage

Fill out an application for a Quicken Loan

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This article has 4 comments

  1. Destiny

    1% is amazing! This wasn’t available when we bought our home, but it sure would have made a big difference for us, and caused a lot less stress from the beginning. But… we got through it. Our downpayment was less than my parents’ downpayment many years ago, so that was a plus at least.

    I think it’s very important to start saving for a downpayment early… that’s something we hadn’t had a chance to do either because the move came up so fast. Talk about not being prepared! We thought we wouldn’t be buying or 2 or 3 years yet.

  2. Justine

    Never heard about this 1% down mortgage before, thank you so much for providing more information about it. I don’t think many people know it.

    It’s good that they’ve put a few restrictions on it though, otherwise, everybody would start abusing this system and taking advantage of it.

    It’s a really good option if you fit the required criteria. Low rates and available with no monthly Mortgage Insurance, the best deal.

  3. bandanablanket@gmail.com

    Wow, thanks for the links to the information and application! I will have to work on my ICA score aas I’ve had a car repossessed due to the loss of a job. I’m interested in buying a new mobile home (they call them something else but I’m stuck with 1970s lingo) and they are in the range of $200k so $2,000 to $3,000 is right up my alley!

  4. saygorem@gmail.com

    Wow, I don’t imagine there is something like this. It is a convenient way and affordable way to own a house but it is only available for those who have less income as the median income of the country.

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