Conventional 97 Loan: A Low Down Payment Option for Homebuyers


The Conventional 97 loan program is an attractive option for homebuyers looking to secure a mortgage with a low down payment. This article aims to provide a comprehensive guide to the 97 loan, its benefits, eligibility criteria, and frequently asked questions. Whether you’re a first-time homebuyer or looking to refinance, understanding the 97 loan program can help you make an informed decision about your home financing options.

What is the Conventional 97 Loan?

The Conventional 97 loan is a mortgage program backed by Fannie Mae, one of the government-sponsored enterprises. It offers homebuyers the opportunity to secure a conventional loan with a down payment as low as 3% of the home’s purchase price. This program provides an alternative to FHA loans, which typically require a minimum down payment of 3.5%.

Benefits of the Conventional 97 Loan

The 97 loan program offers several advantages for homebuyers:

  1. Low Down Payment: With a minimum down payment of just 3%, the Conventional97 loan makes homeownership more accessible, particularly for first-time buyers who may have limited funds available for a down payment.
  2. No Upfront Mortgage Insurance Premium (MIP): Unlike FHA loans, which require an upfront MIP payment and ongoing monthly mortgage insurance premiums, the Conventional 97 does not have an upfront MIP requirement. This can result in significant savings over the life of the loan.
  3. Competitive Interest Rates: Conventional loans typically offer competitive interest rates compared to other loan programs. This can result in lower monthly mortgage payments and potentially save borrowers thousands of dollars over the loan term.
  4. Flexible Eligibility Requirements: The Conventional loan program has flexible eligibility criteria, allowing borrowers with a good credit history and stable income to qualify. It also allows for the use of gift funds for the down payment, making it easier for borrowers to source their down payment funds.

How to Qualify for a Conventional 97

To qualify for a Conventional 97 loan, borrowers must meet certain criteria:

  1. Credit Score: Lenders generally require a minimum credit score of 620 or higher. However, it’s important to note that individual lenders may have their own credit score requirements, so it’s advisable to shop around and compare options.
  2. Income and Employment: Borrowers must have a stable source of income and a steady employment history. Lenders typically consider factors such as income stability, job history, and debt-to-income ratio when assessing borrower eligibility.
  3. Property Eligibility: The Conventional 97 can be used for the purchase or refinance of one-unit primary residences, including single-family homes, condos, and planned unit developments (PUDs). Certain property types, such as investment properties or second homes, are not eligible for this loan program.

Frequently Asked Questions (FAQs)

What is the minimum down payment required for a Conventional 97?

  • The Conventional 97 requires a minimum down payment of 3% of the home’s purchase price.

Are there income limits for the Conventional 97 program?

  • The 97 loan program does not have specific income limits. However, borrowers must meet the lender’s income and debt-to-income ratio requirements.

Can the Conventional 97 be used for refinancing?

  • Yes, the Conventional 97 can be used for refinancing an existing mortgage, provided the borrower meets the program’s eligibility criteria.

What is the maximum loan amount for a Conventional 97?

  • The maximum loan amount for a Conventional 97 varies depending on the location of the property. Borrowers should consult with their lender to determine the specific loan limits in their area.


The Conventional 97 program offers homebuyers an attractive financing option with a low down payment requirement. With its competitive interest rates, flexible eligibility criteria, and potential savings on mortgage insurance, the 97 loan can help make homeownership more attainable. If you’re considering buying a home or refinancing, exploring the benefits and requirements of the 97 loan can provide you with valuable insights to make an informed decision about your mortgage options.


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