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You’ve Got Options When It Comes to Home Financing

There are many mortgage options that can help make purchasing and maintaining a home more affordable.

Low down payment mortgage options, loans for manufactured homes, and a variety of renovation loans are all available to suit different buyers’ needs. It also helps to research these options before you find a mortgage professional who can help you choose the best one for your financial situation. Here are some options to explore:

Low down payment mortgage options

Balancing everyday expenses while also saving for a home purchase can be challenging. Fortunately, today’s buyers have mortgage options that allow for down payments well below 20% of the home’s purchase price. Some may even be able to buy a home with as little as 3% down.

HomeReady® was created to meet the unique needs of homebuyers who find it hard to save for a large down payment, are relying on nontraditional income, or happen to be facing a variety of other financial challenges.

How can HomeReady benefit you?

  • Down payments as low as 3%.
  • Flexible funding for down payments or closing costs, which allows funds from multiple sources, including gifts, grants from lenders or other eligible entities, and Community Seconds®. No minimum personal funds are required (restrictions apply).
  • Accepts additional income sources like rental payments or boarder income.

For creditworthy homebuyers who would otherwise qualify for a mortgage but may not have the resources for a large down payment, Fannie Mae offers 97% loan-to-value (LTV) financing options.

Are 97% LTV loan terms right for you?

  • Must be a one-unit, principal residence.
  • Fixed-rate mortgages with a maximum term of 30 years and adjustable-rate mortgages (ARMs) are eligible (restrictions apply).
  • Mortgage reserves (if required) may be gifted.

HFA Preferred™ conventional loans are available to buyers with low to moderate incomes and require you to work directly with your state Housing Finance Agency (HFA) or an approved lender within their network.

Can an HFA Preferred loan work for your financial needs?

  • Down payment assistance may be available through many HFAs.
  • Lender-funded grants are permitted under certain circumstances.
  • There is no first-time homebuyer requirement.
  • Borrower income limits are set by the HFA.
  • Mortgage insurance is cancelable. (restrictions apply)
  • Reduced monthly mortgage insurance premiums are available for qualified low-income borrowers.

Homeownership education requirement

In order to qualify for a HomeReady, HFA Preferred, or 97% LTV loan, you may be required to complete homeownership education.

Fannie Mae HomeView® is a comprehensive online course that is offered free of charge and can be used to satisfy the requirement.

Go to HomeView certificate course

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Affordable mortgage options are available for manufactured homes

Manufactured homes can be a more affordable option compared to site-built homes. There are a variety of modern, attractive models built to high standards with many of today’s sought-after amenities. Manufactured homes can come with attached garages, upgraded kitchens and bathrooms, energy-efficient appliances, and architectural features that blend seamlessly into a variety of neighborhoods. The main difference is they’re built indoors in efficient state-of-the-art facilities, and then delivered and installed on your chosen home site.

For borrowers looking to purchase a manufactured home that is built to meet construction, architectural design, and energy-efficiency standards more consistent with site-built single-family homes, MH Advantage® could be the right mortgage loan option.

Is an MH Advantage loan right for you?

  • This loan allows for 30-year fixed-rate financing.
  • The down payment can be as low as 3%. 
  • You have the flexibility to fund your down payment through multiple sources, including gifts and grants.
  • There is a potential for lower interest rates compared with other manufactured home financing.
  • There is an opportunity for cancelable mortgage insurance once you reach 20% equity in your home.

Why does the MH Advantage sticker matter to homeowners?

The MH Advantage sticker, like the one shown here, identifies homes that meet the standards for an MH Advantage mortgage. The presence of this sticker means that you, and any future buyer of the home, will be eligible for MH Advantage financing, including the benefits mentioned above.

MH Advantage stickers are usually applied near the HUD Data Plate (a government-required sticker) in a discreet location, such as in the utility closet or in a cabinet under the kitchen sink.

If the sticker is removed or damaged, it may impact the ability of the property to qualify for MH Advantage financing in the future, such as in cases of refinancing or resale. If your MH Advantage sticker is removed or damaged, contact the manufacturer of the home to see if a replacement sticker is available.

Standard MH financing provides conventional financing for both single-width and multi-width manufactured homes. This option allows homebuyers interested in a manufactured home the ability to enjoy the flexibility of fixed- or adjustable-rate mortgages.

What are the typical terms for Standard MH financing?

  • Requires at least a 5% down payment
  • Accepted credit scores as low as 620
  • Allows for cancelation of mortgage insurance once 20% equity is reached

Mortgage options for homes needing renovations or energy updates

If the home you love is just in need of an upgrade, there are affordable financing options for renovations and energy updates. And to make it easy, you often get to work with the same lenders you’re already working with for your mortgage.

If you’ve found a home that checks all the right boxes but needs some updates or major repairs, a HomeStyle® Renovation mortgage could be the solution. With HomeStyle Renovation, homebuyers can renovate a home to fit their needs and personal style with just one loan that covers the mortgage and improvements.

HomeStyle Renovation lets buyers finance improvements for up to 75% of the property’s as-completed value or the appraised value of the home once the upgrades are completed.

How can HomeStyle Renovation help upgrade your dream home?

  • Down payments as low as 3% for first-time homebuyers or those combining HomeStyle Renovation with a HomeReady mortgage.
  • Cancelable mortgage insurance and today’s competitive interest rates, which may be lower than a home equity line of credit or personal loan.
  • The flexibility to use HomeStyle Renovation for any projects such as updates to an older home, extensive design improvements, and even to construct or renovate additional living spaces like in-law suites and basement apartments.
  • Start your projects sooner without having to spend out of pocket by using upfront draws. (This is how contractors get paid for things like permits and architect’s fees.)
  • One monthly payment with renovation funds bundled into your mortgage under one loan.
  • Immediate equity in the home created by any renovations.

You shouldn’t have to choose between an energy-efficient home and a balanced budget. With a HomeStyle Energy mortgage, there are options for keeping your utility bills low and your home environment healthy.

HomeStyle Energy mortgages let homebuyers use up to 15% of the “as completed” value of the property — that’s the value of the home once the upgrades are completed — for new energy improvements. Improvements above $3,500 may require a Home Energy Reporting System (HERS), Department of Energy (DOE), or comparable report.

What can a HomeStyle Energy mortgage be used for?

  • Energy efficiency improvements including ENERGY-STAR® certified products, smart thermostats, HVAC systems, basic weatherization and insulation, energy-saving windows and doors, and water heaters.
  • Water efficiency improvements including water-saving toilets and low-flow shower heads and faucets.
  • Renewable energy improvements including solar panels, wind power, and geothermal power.
  • Home resilience/natural disaster readiness projects including storm surge barriers, foundation retrofitting for earthquakes, brush and tree removal in fire zones, retaining walls, and radon remediation system installation.
  • Existing energy improvement debt from Property Assessed Clean Energy (PACE) loans, credit cards, and home equity credit lines.

Even more affordable options for homebuyers

There are many additional affordable paths to buying property and building equity for your future.

Although we work with mortgage servicers to help homeowners avoid foreclosures, foreclosures are sometimes an unavoidable reality of the real estate market. We’ve made a commitment to neighborhood stabilization across the country by making previously foreclosed homes available to new buyers at an affordable price.

What are the benefits of the HomePath Ready Buyer program?

  • First-time homebuyers of HomePath® properties who take Fannie Mae’s HomeView course and receive a certificate of completion may receive up to 3% in closing cost assistance when purchasing a HomePath property.
  • Both the HomePath Ready Buyer™ program and a HomeReady mortgage can be combined on the same home purchase.
  • Buyers planning to live in a HomePath home as their primary residence get an exclusive “first look” at what’s available and may even be able to put in an offer without competition from real estate investors.
  • Additional closing cost assistance may be available for owner-occupant buyers of HomePath properties if their household income is at or below the area median income (AMI).

Check out our HomePath portal to search homes for sale

Customize your searches based on location, price, square footage, property status, number of bedrooms or bathrooms, or any other preferences that matter to you.

Visit HomePath

Shared equity programs are usually run by government or nonprofit organizations and give first-time or low- and moderate-income buyers access to housing at prices much lower than typically available in a market. 

Why are shared equity programs a good option for some borrowers?

  • They are usually only available to buyers below a certain income level.
  • Agreeing to the terms can mean the home is yours for as long as you'd like, and you might even be able to pass it down to your family.
  • Pre-approval with the program provider may be needed for things like refinancing or home equity loans. Counseling to help homeowners make these kinds of financial decisions is usually offered in this instance.

Common shared equity programs

Community Land Trust (CLT): By selling only the home and leasing the land long-term to a homeowner at an affordable rate, CLTs significantly reduce the cost of buying a home.

Deed-restricted and below-market-rate homeownership programs: Homes are made available to buyers at a price below the market price through subsidies provided directly by a local government or non-profit. When it comes time to sell the home, in most cases, buyers need to meet certain income requirements.

Limited-equity cooperatives: Instead of buying land and a home, residents in limited-equity cooperatives buy shares in housing co-ops where ownership of the property is held jointly by all members. Those shares can then be resold at an affordable rate.

Many types of affordable mortgage loans are available to homebuyers with options to suit different income levels and financial situations. Learn about as many as you can so that you can make an informed decision about your future as a homeowner.

More to explore