Core Insights - Many home buyers mistakenly believe a minimum down payment of 20% is required, while the typical down payment for first-time buyers in 2024 is only 9% [1] - Loan programs are available that allow down payments as low as 1%, making homeownership more accessible [2][3] Down Payment Options - A 1% down payment loan requires borrowers to pay just 1% of the home's purchase price, with the remaining 2% covered by the lender as a grant [3] - The HomeReady and Home Possible loan programs from Fannie Mae and Freddie Mac allow for total down payments of 3% [3][18] Qualification Criteria - To qualify for a 1% down payment loan, borrowers must meet credit requirements and earn less than 80% of their area's median income [2][4] - For example, in Washington, D.C., the area median income is $162,000, with an income limit of $129,600 for the HomeReady program [4] - Lenders assess borrowers based on their debt-to-income ratio to determine repayment ability [7] Lenders Offering 1% Down Payment Mortgages - National lenders such as Rocket Mortgage, BMO, and Guild Mortgage offer 1% down payment loan products, each with specific terms [8][16] - Local lenders may also provide similar options, such as Riverbank Finance in Michigan, which offers a maximum lender gift of $7,000 [11] Pros and Cons of 1% Down Payment Loans - Advantages include retaining more cash for other expenses and gaining home equity without a large initial investment [12][13] - Disadvantages include potentially higher monthly payments and less equity in the property, which could lead to owing more than the property's worth if values decline [12][13] Alternative Loan Options - Other low-down payment options include FHA loans (3.5% down), VA loans (0% down for eligible military members), and USDA loans (no down payment for qualifying rural buyers) [14][18]