How do you want to get started?
Quick application
With Millennial Home Loans quick online loan application, determining if you qualify for a Home Buyer Advantage Loan Program and for how much, has never been easier.
Talk to a Home Buyer Advantage Loan Program Mortgage Expert
Not ready to apply online? No problem. Answer a few questions, and a Home Buyer Advantage Loan Program Mortgage Expert will call you back.
Home Buyer Advantage Loan Program
Home Buyer Advantage Conventional Mortgage Loan with Low 3% Down Payment Requirements
With only a 3% down payment requirement, home buyers can purchase a house with no monthly mortgage insurance and receive closing cost help from the seller up to 6% of the purchase price. Best of all this loan program allows manual underwriting with credit scores down to 620 and potentially no maximum income guidelines when purchasing a house in a low-to-moderate income census tract.
Home Buyer Advantage Loan Program Guidelines
Loan Purpose
- Purchase only
Documentation
- All loans must be fully documented per Agency Guidelines
- For Self Employed borrowers, in addition to Agency Guidelines, one year (possible if two years in the same industry) or two years of the tax returns (personal and business) along with a year-to-date profit and loss (unaudited)
Down Payment/Closing Costs – Purchase
- Minimum Down Payment: 3% of the purchase price, which can come from the following sources:
- Borrower’s own savings
- Gift
- 401k loans
- Seller contribution toward buyers’ closing costs and escrows 6% of the purchase price
- Additional subordinate financing must meet requirements for a community second per the Fannie Mae selling guide. Maximum 105% CLTV for all Community Seconds transactions
Income Restrictions
- Income limit is based on the Area Median Income (AMI) as designated by the FFIEC at: https://geomap.ffiec.gov/FFIECGeocMap/GeocodeMap1.aspx
- Select the most current year data and enter the property address, click on “search”
- On the results screen click on “Get Census Demographic”. If button is “grayed-out” go back and select the previous year information
- The income calculation for eligibility is: <80% of the “FFIEC Estimated MSA/MD/Non-MSA/MD Median Family Income”
- Income limit waived if “Tract Income Level” is Low or Moderate (per the FFIEC web site)
- If the “Tract Income Level” is Middle or High the borrowers’ qualifying income must be less than 80% of the median income for the MSA
- Income is based on the income reported on the loan application, not household income or even the total income of the borrower should the borrower opt to exclude portions of their income (i.e. bonus or overtime) if not needed for the loan approval
- If the property address changes, the income limits could also change
Loan Amount
- Loan amount not to exceed 2025 conventional loan limits of $806,500 or if the property is in a High Balance area the FHFA Conforming Loan Limits are up to $1,209,750
Loan-To-Value
- 97% Loan-to-Value
- 105% CLTV with secondary financing from an acceptable housing agency
Mortgage Insurance:
- No mortgage insurance required
Property Type
- Primary residences/Owner-occupied only
- 1-unit properties
- Fannie Mae approved condos
- PUD’s (i.e. Townhomes)
Ratios
- AUS Approval – Maximum 43.00% DTI, Housing Ratio determined by AUS
- Manual Underwrite – Maximum 36.00%/43.00%
Terms
- 30-year fixed
- 10/6 ARM with 30-year amortization with the following:
- Margin: 75%
- Caps: 2/1/6
- Index: 30-day compounded average of SOFR – Secured Overnight Financing Rate
- Fully amortizing, monthly payments only
Credit Profile
- Desktop Underwriting findings “Approve/Eligible” or “Approve/Ineligible”
- 620 minimum middle credit score for all borrowers on the loan
- Rental verification:
- Not required if Desktop Underwriting findings are “Approve/Eligible” or “Approve/Ineligible”
- If required rental verification if currently renting either written verification of rent or most recent 12 months of proof of positive rental history
- Collection accounts placed:
- Within the past 36 months must be paid in full prior to closing
- Outside of 36 months may remain outstanding if not turned into a judgement
- Authorized User Tradeline Requirements:
- If the credit history includes non-spousal authorized user accounts the borrower must have at least three acceptable trade lines that are not authorized user accounts, which may be traditional or non-traditional trade lines with a minimum 12-month repayment history
- Authorized user accounts that are the borrower’s spouse’s account are eligible to use to establish an acceptable credit history. Documentation will need to be obtained to verify the authorized user accounts are the borrower’s spouse’s accounts
- No credit scores. Non-traditional credit may be used provided:
- No late payments, collections, judgments, or charge-offs on the traditional credit report
- Minimum three non-traditional credit sources verified with acceptable repayment histories for at least the past 12 months (no late payments)
- All applications with a credit score must be submitted to DU for recommendation
- DU Approve/Eligible:
- Minimum credit score: 620
- Maximum debt-to-income ratio: 43.00%
- DU Approve/Ineligible:
- Minimum credit score: 620
- Maximum debt-to-income ratio: 43.00%
- Credit deemed acceptable if the only reason for being ineligible is due to the LTV/CLTV
- DU Refer with Caution or Approve/Ineligible that does not meet the above criteria – credit must meet the following:
- Minimum credit score: 620
- Maximum debt-to-income ratio: 43.00%
- Minimum tradelines:
- Three (3) acceptable active tradelines opened for at least 12 months with current balances
- Minimum of 12 regular on-time monthly payments paid by the borrower
- Trade lines may be traditional or a combination of traditional and non-traditional
- Acceptable trade lines may not include non-spousal authorized user accounts
- No bankruptcy, foreclosure, or short sale in the past 5 years prior to mortgage application date
- No non-medical collections or judgments placed in the past 12 months prior to mortgage application date
- Judgments over 12 months old must be paid in full prior to closing. Judgements placed within the past 12 months will be a loan disqualifier
- Collection Accounts (including medical) placed:
- Within the past 36 months prior to mortgage application date must be paid in full
- More than 36 months prior to the mortgage application date may remain open if the credit history is deemed acceptable
- Late payments as reported on the credit report:
- Maximum 1×30 days late on installment or revolving debt in the past 12 months
- Maximum 2×30 days late on installment or revolving debt in the 12th to 24th prior months
- Rent Payment History: No 30-day late rental payments in the last 12 months
- No currently past due accounts
- Charge offs:
- No charge-offs placed within the past 36 months based on the date of last activity on the credit report
- Charge-offs older than 36 months prior to mortgage application date do not need to be paid off
- DU Out of Scope – see non-traditional credit requirements in Credit section
Employment History
- Two (2) years required to be completed on the application; can include schooling, if applicable
- Minimum 12 months full-time employment history; full-time student in college may be used to meet the minimum 12 months full-time employment history (full-time is considered 35+ hours/week)
- Minimum 12 months employment history for less than full-time employment; full-time student in college may be used to meet the 12-month requirement. In addition, if a borrower works multiple less than full-time jobs (such as two 20 hour/week jobs), a minimum 12-month history of working the multiple jobs is required
- Must be on the current job at least 6 months prior to the date of application if there is an employment or schooling gap of 6 months or more
- Minimum 24-month history of working a part-time and full-time job together to use the part-time income for qualifying (does not need to be the same two jobs for the past 24 months, but no gaps greater than 60 days allowed to use the part-time income for qualifying)
- Self-employment – minimum 24-month history of self-employment; 12-24 months of self-employment income allowed if at least one full year federal income tax return has been filed, and the borrower has a history of working in the same line of work for at least 2 years prior to becoming self-employed
Home Buyer Education
- At least one borrower must complete the Framework on-line education program at https://educate.frameworkhomeownership.org/ or a completed training by any education course that meets National Industry Standards (NIS)
- For loans that involve a Community Seconds or down payment assistance program, buyers may instead complete the homeownership education course or counseling required by the Community Seconds or down payment assistance program if it is provided by a HUD-approved agency and completed prior to program if it is provided by a HUD-approved agency and completed prior to closing
- A copy of the home buyer education certificate of completion must be provided prior to the loan closing
Talk to a Home Buyer Advantage Loan Program Mortgage Expert
Not ready to apply online? No problem.
Answer a few questions, and a Home Buyer Advantage Loan Program Mortgage Expert will call you back.
