Low-Down-Payment Conforming Programs (Conventional 97, FHA, VA)

A cluster of low-down-payment programs sits in the conforming-loan world: the Fannie Mae and Freddie Mac Conventional 97 / HomeReady programs (3% down; the standard 97% tier requires a first-time buyer on at least one application and carries no income cap, while the HomeReady and Home Possible variants drop that requirement and cap qualifying income at 80% of area median instead; either way the loan is held to the baseline conforming limit, since high-balance loans are excluded); FHA loans (lower credit-score floor, higher mortgage-insurance cost); and VA loans (zero down, no PMI, restricted to qualifying veterans). They exist, they are widely advertised, and for the readers of this book they are almost never the right tool: loan sizes max out at conforming limits, the underwriting friction does not scale, and the mortgage-insurance carry on FHA loans is structurally worse than the Jumbo alternatives at section “Jumbo Loan Microstructure”. If your purchase price and down payment land you inside the conforming envelope and you qualify for the VA benefit, take it; otherwise treat these programs as background context and move on.