Buying a home can feel out of reach, especially with high down payments. But what if owning your dream home was possible with just 1% down? In 2025, several top lenders are making homeownership more accessible with 1% down payment mortgage programs. This guide breaks down the leading lenders, their requirements, and how you can take advantage of this opportunity to finally achieve your homeownership dreams.

Why 1 Percent Down Payment Mortgages Matter

For many aspiring homeowners, a large down payment poses the biggest barrier to buying a home. Traditionally, most lenders require a 20% down payment to secure favorable mortgage terms, leaving many buyers struggling to save thousands of dollars. But with 1% down payment mortgage programs, the landscape is changing. These programs lower the entry barrier, offering a lifeline to first-time buyers or those without substantial savings.

With rising home prices and rental costs in 2025, these options are more important than ever. By paying just 1% upfront, you can secure your dream home sooner and leave monthly rent payments behind.

Common Challenges With Lower Down Payments

If you’re considering a 1% down payment program, you might also worry about the potential pitfalls. Here are some common challenges prospective buyers face:

• Higher Monthly Payments: Smaller down payments mean larger loan amounts, and that can lead to bigger monthly mortgage payments.
• Private Mortgage Insurance (PMI): PMI is usually required for mortgages with smaller down payments, adding an extra cost to your loan.
• Eligibility Requirements: Not all buyers qualify for 1% down mortgages, as lenders often look for strong credit scores and steady income to mitigate their risk.
• Seller’s Market Pressure: Low down payments might not look as favorable to sellers, especially in competitive markets.

Understanding these challenges will help you make informed decisions and develop strategies to overcome them. Now, let's see which lenders are offering these programs in 2025.

Top Lenders Offering 1 Percent Down Payment Mortgages

1. Rocket Mortgage

Rocket Mortgage leads the charge in making mortgages more accessible. Their 1% down payment mortgage program invites first-time buyers with credit scores of 620 or above to apply. Plus, the lender may cover part of your closing costs.

• Eligibility: First-time buyers with a credit score of at least 620.
• Benefits: Fast approval process, competitive interest rates, and no hidden fees.

2. Guild Mortgage

Guild Mortgage makes homeownership more accessible with its 1% down payment program, which includes generous down payment grants to further reduce costs. It’s a simple, affordable way to take the next step toward your dream home.

• Eligibility: Buyers with stable employment history and credit scores in the good-to-excellent range (680+).
• Benefits: Down payment assistance grants and flexible loan options.

3. Fairway Independent Mortgage

Fairway, renowned for its customer-first approach, provides 1% down payment loans to buyers in designated "underserved" areas, making homeownership more accessible and supporting communities identified by housing organizations.

• Eligibility: Property must be located in designated underserved areas; average credit scores around 650+.
• Benefits: Community-focused programs with reduced fees.

4. Guaranteed Rate

Guaranteed Rate brings innovative loan terms tailored to young professionals and first-time buyers. Their 1% down payment mortgages allow flexible debt-to-income ratios, ensuring affordability for borrowers.

• Eligibility: First-time buyers, self-employed individuals, and buyers with non-traditional credit histories.
• Benefits: Flexible DTI ratios and personal loan advisors to guide your process.

5. Bank of America Affordable Loan Solution

With a focus on tackling housing inequality, Bank of America’s 1% down mortgage program eliminates PMI fees, offering a more affordable home-buying solution and standing out as a top choice on this list.

• Eligibility: Buyers with low-to-moderate incomes and credit scores of 640 or higher.
• Benefits: No PMI (Private Mortgage Insurance) required, keeping monthly costs manageable.

Exploring the Pros and Cons of a 1 Percent Down Mortgage

Before making a decision, consider the pros and cons of opting for a 1% down payment mortgage.

Pros

• Affordable Homeownership: Save tens of thousands in upfront costs.
• Faster Path to Owning: Purchase your home sooner instead of waiting years to save a larger down payment.
• Retain Savings: Keep more funds available for other expenses like emergencies or renovations.

Cons

• Higher Loan Amounts: With less equity upfront, your loan balance will be higher.
• PMI Costs: Many lending programs require PMI, which could increase your monthly payment.
• Tougher Approval Process: These programs may have stricter eligibility requirements.

Weighing these factors, you can determine the best fit for your financial situation and long-term goals.

Tips for Securing a 1 Percent Down Payment Mortgage

• Strengthen Your Credit Score: A strong credit score is one of the keys to qualifying for these programs. Aim for a score of at least 620 or higher, with excellent records on timely payments.
• Organize Your Financial Documents: Lenders will require proof of income, employment history, and bank statements. Prepare these documents in advance to speed up approval.
• Avoid Big Purchases Before Applying: Hold off on major financial decisions, such as buying a car, to prevent negatively impacting your credit or debt-to-income ratio.
• Shop Around: Different lenders have varying eligibility requirements, fees, and benefits. Comparing lenders can land you better terms or added perks.

Conclusion

With the rise of 1% down payment mortgage programs in 2025, the dream of homeownership is well within reach. By understanding your options and carefully choosing the right lender, you can take advantage of these innovative programs and land your first home. If you’re ready to find the perfect 1% down payment mortgage, start by exploring lenders like Rocket Mortgage, Guild Mortgage, or Bank of America. Unlock the door to your dream home and a brighter financial future.