Minimum Borrower Contribution for Purchase Transactions
Fannie Mae does not require a minimum borrower contribution from the borrower’s own funds for any mortgage loan if the loan has an LTV, CLTV, or HCLTV ratio of 80% or less.
If the LTV, CLTV, or HCLTV ratio is greater than 80%, the minimum required borrower contribution from the borrower’s own funds is dependent on the number of units, as noted in the table below.
|Number of Units||
Minimum Borrower Contribution
Minimum Down Payment Requirement 1
|One 2||None||3% 3|
|Three or four||3%||25%|
See B3-4, Asset Assessment, and B5-5.1-02, Community Seconds Loan Eligibility, for information about allowable sources of funds for completing the transaction.
No minimum contribution is required in connection with a limited cash-out refinance transaction.
1 Refer to the Eligibility Matrix for additional details.
2 A minimum 3% borrower contribution and minimum down payment of 5% is required if sweat equity is being used toward the down payment for one-unit HomeReady purchase transactions. See the Sweat Equity section in this topic for additional requirements.
3 3% down payment is permitted for certain purchase transactions. See B5-6-01, HomeReady Mortgage Loan and Borrower Eligibility.
For additional information, see B5-6-02, HomeReady Mortgage Underwriting Methods and Requirements.