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LISTED BELOW ARE SIMPLE ANSWERS TO MOST OF YOUR QUESTIONS ABOUT THE CONVENTIONAL 97 MORTGAGE    Is the Conventional 97 a government-backed mortgage program? Yes, the Conventional 97 mortgage program is backed by the government. It's offered via Fannie Mae only. The program is not available via Freddie Mac, nor is it available via the Federal Housing Administration (FHA), Department of Veterans Affairs (VA) or the U.S. Department of Agriculture (USDA). What is the minimum downpayment required with the Conventional 97 mortgage program? The Conventional 97 program requires a 3 percent downpayment, at minimum. The 3 percent minimum is based on the lower of the home's appraised value or purchase price. 3 percent on a $200,000 home purchase is $6,000 for downpayment. By comparison, an FHA mortgage would require at least $7,000 down. Is the Conventional 97 program "cheaper" than an FHA mortgage? Yes, in many cases, the Conventional 97 program is less expensive than an FHA mortgage. This is because the Conventional 97 program does not require an upfront mortgage insurance premium, and because its annual mortgage insurance rates are cheaper, too. Mortgage rates are often comparable. Can I use the Conventional 97 program for a mortgage refinance? Yes, Fannie Mae allows homeowners to use the Conventional 97 program for rate-and-term refinances only. It may be used for a cash-out refinance. If you plan to use the Conventional 97 to refinance a mortgage pre-dating June 1, 2009, however, consider the HARP refinance first. HARP is a mortgage for underwater homeowners and may offer better loan terms, overall. Are there property type restrictions for the Conventional 97 program? Yes, the Conventional 97 program is property type-restricted. The program may only be used for single-family dwellings. This includes single-family detached homes, single-family attached homes, townhomes, condominiums, co-ops, and rowhomes. Can I use the Conventional 97 for a 2-unit, 3-unit or 4-unit home? No, the Conventional 97 program may only used for single-family dwellings. What is the maximum loan size allowed with the Conventional 97? The Conventional 97 mortgage program is capped at a $417,000 loan size. What is the maximum purchase price for a home using the Conventional 97 program? There is no maximum purchase price to use the Conventional 97 mortgage program, per se, but 3 percent down on $430,000 is equal to $417,000. Therefore, if you're seeking to minimize your out-of-pocket payments, purchase a home for $430,000 or less. Are there occupancy requirements for the Conventional 97 mortgage program? Yes, the Conventional 97 mortgage program enforces occupancy requirements. The Conventional 97 is available for owner-occupied properties only. You may not use the program for second homes or vacation homes; or investment properties. I have a renter in my former primary residence. Can I refinance that home using Conventional 97? No, the Conventional 97 program is for owner-occupied properties only. What is the combined loan-to-value (CLTV) limit for the Conventional 97 program? The Conventional 97 is limited to a combined loan-to-value of 97%. You may not use subordinate financing (e.g.; home equity line of credit, home equity loan, "soft second") in conjunction with a Conventional 97 mortgage. What income documentation does the Conventional 97 mortgage program require? The documentation requirements for a Conventional 97 loan are the same as for any other conventional loan. Mortgage applicants should expect to provide recent pay-stubs, W-2s and federal income tax returns; as well as bank statements and other relevant paperwork. There is no additional paperwork specifically related to the Conventional 97 program. Does the Conventional 97 program require First-Time Home Buyer counseling? No, the Conventional 97 program does not require home buyer counseling for First-Time Home Buyers, or anyone else. What mortgage products are available via Conventional 97? The Conventional 97 program allows for fixed-rate mortgages only. Adjustable-rate mortgages (ARM) are not available. Can I choose the 30-year fixed rate mortgage with the Conventional 97 program? Yes, the 30-year fixed rate mortgage rate is available to home buyers and refinancing households using Conventional 97. ARMs are not available. Can I choose the 15-year fixed rate mortgage with the Conventional 97 program? Yes, the 15-year fixed rate mortgage rate is available to home buyers and refinancing households using Conventional 97. ARMs are not available. Is private mortgage insurance (PMI) required with the Conventional 97 mortgage program? Yes, the Conventional 97 program requires that all borrowers carry mortgage insurance. For how many years must I pay PMI via the Conventional 97 program? The Conventional 97 program follow Fannie Mae rules whereby private mortgage insurance must only be paid until the home reaches 80% loan-to-value, and so long as 12 months have passed from the start of the loan. Does Conventional 97 require upfront mortgage insurance, like an FHA loan? No, the Conventional 97 program does not require upfront mortgage insurance premiums like an FHA loan. It only requires annual mortgage insurance, paid monthly, until such time as 12 months have passed and the home reaches 80% loan-to-value. Does Conventional 97 require a funding fee, like an FHA loan? No, the Conventional 97 program does not require a funding fee like a VA loan. It only requires an annual mortgage insurance premium, which is paid monthly. The annual mortgage insurance is no longer required after 12 months have passed and after the home has reached 80% loan-to-value. Does the Conventional 97 program require minimum credit scores? Yes, the Conventional 97 program requires a minimum credit score, which varies by downpayment source.  All mortgage applicants must show a credit score of 680 or better. However, mortgage applicants accepting gift funds for a downpayment must show a credit score of at least 740. Your credit score is based on the middle of your three credit scores, as reported by the major credit bureaus TransUnion, Equifax and Experian. What is the Conventional 97 minimum FICO score if I am accepting a downpayment gift? For home buyers accepting a gift of downpayment of any size -- even $100 -- the Conventional 97 program requires a credit score of 740 or higher. What is the Conventional 97 minimum FICO score if I am not accepting a downpayment gift? For home buyers making a downpayment from their own reserves/assets, the Conventional 97 program requires a credit score of 680 or better. Can I use the Conventional 97 program if my credit score is below 680? No, the Conventional 97 requires a credit score of at least 680. If your credit score is below 680, consider an FHA mortgage. The FHA allows for 3.5% downpayment with a minimum credit score of 580 in many cases.  We offer FHA loans with a credit score as low as 520, but requires a higher downpayment Who does the Conventional 97 consider to be an acceptable "donor" for gift funds? Conventional 97 restricts from whom a buyer can accept gift funds. Buyers can accept from a relative, which includes a spouse, child, or anyone else related by blood, marriage, adoption, or legal guardianship. Gifts may also be accepted from a fiance/fiancee or a domestic partner. Can I accept a gift of downpayment from my REALTOR® or the seller? No, a REALTOR® may not provide the gift of downpayment, nor may any other interested party to the transaction. This includes the seller, the mortgage lender, and the title representative, among others. Does the Conventional 97 program enforce a maximum Debt-to-Income (DTI)? Yes, the Conventional 97 mortgage program enforces a maximum DTI, which varies by downpayment "source". Mortgage applicants making a downpayment from their own funds may not exceed 45% debt-to-income via the Conventional 97 program. Mortgage applicants accepting gift funds for a downpayment are limited to 41% DTI. Debt-to-income is calculated by dividing your total monthly debt obligations into your total verifiable monthly income. How long does it take to close with Conventional 97 financing? The Conventional 97 program takes no longer to underwrite than any other conventional mortgage usually less than 30 days  When does the Conventional 97 program expire? The Conventional 97 mortgage program does not "expire". It's not like the Home Affordable Refinance Program (HARP), which was created to spur housing and the economy. Fannie Mae's 3 percent downpayment program is indefinite.
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* most closings average 21 days.  It is important to note that delays can occur any time throughout the loan process due to borrower document errors, incorrect or illegible information, credit rating changes during the review period and not providing documents in a timely manner when requested by underwriting. 
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