1% Down Mortgage Programs 2026
Buy a home with just 1% down — the lender covers the other 2%. Real programs, real lenders, real requirements.
Quick Answer: How 1% Down Mortgages Work
You put down 1% of the purchase price. The lender contributes a 2% grant (non-repayable). You start with 3% equity at closing — same as a standard 3% down conventional loan. PMI applies until you hit 20% equity. Programs are available through Rocket Mortgage, UWM, Guild Mortgage, and select regional lenders. Income must be at or below 80% of your area's median income (AMI).
1% Down Mortgage Programs Compared (2026)
All major programs: you pay 1%, lender grants 2%, total equity = 3%.
| Program | Your Down | Lender Grant | Min Credit | Income Limit | First-Time Only? |
|---|---|---|---|---|---|
Rocket Mortgage ONE+ Rocket Mortgage Most widely available | 1% | 2% | 620 | 80% AMI | No |
Conventional 1% Down UWM (United Wholesale) Strictest income limit | 1% | 2% | 620 | 50% AMI | No |
1% Down Advantage Guild Mortgage Strong regional presence | 1% | 2% | 640 | 80% AMI | No |
HomeOne (3% down) Freddie Mac (any lender) No income limit | 3% | None | 620 | None | Yes (one borrower) |
How 1% Down Mortgages Actually Work
You contribute 1% at closing
On a $300,000 home, that's $3,000 from you. This must come from your own funds — not a gift (for most programs).
Lender grants you 2%
The lender adds $6,000 as a non-repayable grant. You don't pay this back — ever. It's not a second mortgage or deferred loan.
You close with 3% equity
Your loan is structured as a standard 97% LTV conventional loan. Same underwriting, same rates, same PMI rules as any 3% down conventional.
PMI until 20% equity
You'll pay PMI (typically $50-200/month) until your loan balance drops to 80% of the home's value. Auto-cancels at 78% LTV.
Down Payment Cost Comparison: $300,000 Home
Assumes 6.75% rate, 30-year term, $1,500/year taxes, $1,200/year insurance.
| Down Payment | Cash Needed | Lender Grant | PMI/mo | Payment/mo |
|---|---|---|---|---|
| 1%This program Lender covers 2% | $3,000 | $6,000 | $150 | $1,847 |
| 3% Standard conventional | $9,000 | — | $130 | $1,829 |
| 5% Lower PMI | $15,000 | — | $100 | $1,793 |
| 10% Much lower PMI | $30,000 | — | $55 | $1,720 |
| 20% No PMI | $60,000 | — | $0 | $1,610 |
Who Qualifies: Eligibility Requirements
You likely qualify if:
- ✓Credit score 620 or higher
- ✓Household income ≤ 80% AMI
- ✓Buying a primary residence
- ✓Single-family home, condo, or townhome
- ✓Loan within conforming limits ($806,500)
- ✓Stable 2-year employment history
- ✓DTI ratio below 45-50%
You likely don't qualify if:
- ✗Credit score below 620
- ✗Income exceeds 80% AMI
- ✗Buying investment property or vacation home
- ✗Buying a 2-4 unit property
- ✗Loan exceeds conforming limits
- ✗Recent bankruptcy or foreclosure (2-4 years)
- ✗DTI ratio above 50%
2026 Income Limits by Metro Area (80% AMI)
Approximate household income limits for a family of 4. Individual limits vary by household size.
Source: HUD FY2026 Income Limits. Verify at huduser.gov.
1% Down Mortgage: Pros & Cons
Pros
- +Minimal cash required: $3,000 buys a $300K home vs. $60,000 for 20% down
- +Free 2% equity: Lender grant is non-repayable — pure equity from day one
- +Conventional loan benefits: No upfront MIP like FHA, PMI is cancellable
- +Build equity vs. renting: Every payment builds ownership
- +Competitive rates: Not penalized for low down payment
Cons
- −PMI cost: $100-200/month until 20% equity — adds $12K-$24K over 10 years
- −Income limits: 80% AMI excludes many buyers in higher-income households
- −Limited lenders: Not every lender offers this program
- −Underwater risk: Small equity buffer if home values drop early on
- −Closing costs still apply: You still need $6K-$12K for closing costs
How to Apply for a 1% Down Mortgage
- 1
Check your income against AMI limits
Use the HUD AMI lookup tool or ask a lender to verify your household income qualifies (≤80% AMI for most programs).
- 2
Pull your credit report
You need 620+ for most programs. Check all three bureaus at AnnualCreditReport.com. Dispute any errors before applying.
- 3
Get pre-approved with a participating lender
Not all lenders offer 1% down programs. Contact Rocket Mortgage, Guild Mortgage, or a UWM-approved broker directly.
- 4
Gather your documents
W-2s (2 years), pay stubs (30 days), bank statements (2 months), tax returns, and ID. Self-employed borrowers need 2 years of business returns.
- 5
Complete homebuyer education (if required)
Some programs require a HUD-approved homebuyer education course (~$75-125). Fannie Mae's HomeView course is free online.
- 6
Make an offer and close
Once pre-approved, work with a real estate agent to find a qualifying property. The lender's 2% grant is applied at closing.
1% Down vs. FHA vs. USDA: Which Is Better?
| Feature | 1% Down Conventional | FHA (3.5% down) | USDA (0% down) |
|---|---|---|---|
| Min down payment | 1% | 3.5% | 0% |
| Min credit score | 620 | 580 (500 w/ 10%) | 640 |
| Income limits | 80% AMI | None | 115% AMI |
| Location limits | None | None | Rural/suburban only |
| Mortgage insurance | PMI (cancellable) | MIP (life of loan if <10% down) | Annual fee (cancellable) |
| Upfront fee | None | 1.75% UFMIP | 1% guarantee fee |
| Best for | 620+ credit, limited savings, any area | Lower credit scores | Rural buyers, zero down |
See If You Qualify for 1% Down
Takes 3 minutes. Check your income limit, credit score, and get pre-approved with a lender that offers 1% down programs.
No SSN required for initial check. Soft credit pull only.
Frequently Asked Questions
What is a 1% down mortgage?
A 1% down mortgage lets you buy a home by putting just 1% of the purchase price as a down payment. The lender contributes a 2% grant (non-repayable), giving you 3% total equity at closing. Programs like Rocket Mortgage ONE+, UWM Conventional 1%, and Guild 1% Down work this way.
Who qualifies for a 1% down mortgage in 2026?
Requirements vary by program but generally: 620+ credit score, income at or below 80% of area median income (AMI), primary residence only, single-family home or condo. First-time buyer status is not always required.
Is a 1% down mortgage a good idea?
It can be — especially if you have stable income but limited savings. The tradeoff is PMI until you reach 20% equity. On a $300K home, PMI runs $100-200/month. If you plan to stay 5+ years and home values rise, the equity gain often outweighs the PMI cost.
What is the income limit for 1% down mortgage programs?
Most programs cap income at 80% of the Area Median Income (AMI). In 2026, that is roughly $65,000-$85,000/year in most metros. High-cost areas like San Francisco or New York have higher AMI limits. Use HUD's AMI lookup tool to check your specific area.
Do 1% down mortgages have higher interest rates?
Not necessarily. Rocket ONE+ and UWM Conventional 1% use standard conventional pricing. Your rate depends on your credit score, loan amount, and market conditions — not the down payment program itself. Rates are typically within 0.125-0.25% of standard conventional rates.
Can I use a 1% down mortgage to buy any home?
Most programs limit to: single-family homes, condos (warrantable), and townhomes. Multi-family properties, investment properties, and vacation homes are not eligible. The home must be your primary residence and meet conventional loan limits ($806,500 in 2026 for most areas).