Fannie Mae 97% LTV Loan Question

4 Replies

Hey everyone, 

I've got a question about Fannie Mae's new 97% LTV loan for first time homebuyers. I currently own a home in which I just refi'd out of a FHA loan to a 15 year conventional. I'm looking to purchase my first rental home, or move to a new Primary and rent out my current home.

Because of the growing prices in my neighborhood, I'm leaning more towards purchasing a new primary, with the growing family and all, I feel it is the best first move, as in the end I will have my first rental home.

I know that to qualify for this loan at least one of the applicants needs to be a first time homebuyer. I purchased my first home before my wife and I got married, and I was the primary buyer. But now that we are married, and I am refinancing, The state of Michigan requires a non-borrowing spouse to sign paperwork and be listed as a co-owner of the home. Does this constitute as her being a homeowner? Or is she still considered a first time homebuyer because she is not a borrower?

I like the idea of only putting 3% down for a new primary, as that will leave me in a better position to purchase another investment property more quickly.


Hi Brian, is your wife's name actually on the title of the house? If not, then I would think she's not considered a homeowner and you could qualify for the new Fannie 97% program. I would look that up (your property tax statement would show it) and then call up your lender and ask if you can qualify. Worst case, if you don't qualify under the 97% program, you can still come in with as little as 5% for a Fannie loan. I don't know how much you're planning to spend, but another 2% down payment may not be that bad.  

@Mark F.  

Thanks for the reply. I agree, just trying to save every penny I can to get into my next Principal residence so that I can jump right into rentals, but yes 2% is not bad.

How do you feel about FHA? Since I am getting rid of my first FHA, I should be eligible for a new one I would think. Especially now with the lower PMI and initial fees.

Moving this question over to Financing advice, seems like a better fit!

FHA's not bad, the problem is the mortgage insurance can be steep. You'll pay two kinds: the upfront MI, which is 1.75% of the loan amount, and the annual kind, which is 1.35% (though soon to be lowered by FHA) of the loan amount, divided by twelve, and added to your payment for the life of the loan. You might want to have your loan guy price out both the 5% down Fannie conventional and the FHA 3.5% down and see which one works out better.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here