Garden State Home Loans has launched a 1% down payment program for first-time buyers, opening the door for millennial purchasers. This option is exclusive to home buyers in New Jersey, Connecticut, Florida and Pennsylvania.
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The 1% down payment option is only applicable to purchase mortgages for properties used as a primary residence. The required credit score for this program is a hard 720 minimum, with a DTI of no higher than 43%.
Once a borrower using the program contributes 1% of a property's purchase price, the mortgage lender will supply an additional 2% toward the down payment, allowing the buyer to have 3% equity at the time of closing.
The maximum loan amount for this payment option is $424,100. The program is available with no mortgage insurance.
In 2014, Fannie Mae and Freddie Mac introduced 3% down payment options, opening the door for lenders to offer similar products.
Among those offering a 1% down payment option is Quicken Loans, whose executive vice president of capital markets, Bill Banfield, credited the company's 1% down program as "an instant success."
Others with a 1% down option include