Fannie Mae offers a conventional mortgage program that enables first-time home buyers to buy a home with down payment of 3% of the property purchase price without using a buyers assistance program. This program is known as the Fannie Mae 97% LTV Ratio program because when you make a 3% down payment to buy a home, the loan-to-value ratio (the amount of your mortgage divided by the value of the property) is 97%. Fannie Mae is a government-sponsored organization that creates mortgage programs and provides capital to lenders. Fannie Mae’s mortgage programs are offered through approved lenders.
The Fannie Mae 97% LTV Ratio / 3% Down Payment Program is a conventional alternative to government-backed low or no down payment programs such as the VA, FHA and USDA loan programs.
Although Fannie Mae develops and sponsors the 97% LTV / 3% Down Payment Program, borrowers do not interact with Fannie Mae when they apply for a mortgage. Borrowers must apply for the program through an authorized lender such as a bank, credit union or mortgage broker. These authorized lenders make sure that the applicant meets the program eligibility guidelines and borrower qualification requirements.