3% down.PMI that ends.
A conventional loan can start at 3% down, and unlike FHA its mortgage insurance has an exit. This page shows who gets 3%, when PMI comes off, and the 2026 limits.
Our comparative assessment: cash saved 40%, ease 25%, speed 15%, fewer strings 20%. Full rankings
Conventional loans follow Fannie Mae and Freddie Mac rules. Three paths reach 3% down: HomeReady and Home Possible for incomes at or below 80% of area median income, and the standard 97% loan when at least one borrower is a first-time buyer. Private mortgage insurance (PMI) applies at these low down payments, but it can be removed on request at 80% of the original value and ends automatically at 78%. The 2026 conforming limit for one unit is $832,750.
Who qualifies.
- HomeReady (Fannie Mae): income up to 80% of area median income; the 3% down tier is for one-unit, fixed-rate loans.
- Home Possible (Freddie Mac): 3% down, income up to 80% of area median income, 1 to 4 units.
- Standard 97% loan: at least one borrower is a first-time buyer (no ownership interest in the last 3 years).
- HomeReady requires homebuyer education when all occupying borrowers are first-time buyers.
- Loan within the 2026 conforming limits: $832,750 for 1 unit; in DFW counties $1,066,250 for 2, $1,288,800 for 3, $1,601,750 for 4.
How it works.
Choose the 3% path
Income at or below 80% of area median points to HomeReady or Home Possible. Above that, the standard 97% loan needs a first-time buyer on the loan.
Pre-approval
The lender runs the file through automated underwriting and prices PMI for the down payment and credit profile.
Negotiate seller help
On a principal residence, seller concessions are capped at 3% above 90% loan-to-value, 6% from 75.01% to 90%, and 9% at 75% or less.
Close
With 3% down, PMI is part of the monthly payment from closing.
Remove PMI
At 80% of the original value, the borrower can request removal with a good payment history. At 78% it ends automatically if payments are current, and no later than the loan's midpoint.
Example: 3% down on a $350,000 home
Example only. The 80% and 78% points are measured against the original value under the Homeowners Protection Act; removal at 80% requires a request and good payment history, and automatic termination at 78% requires the loan to be current. PMI cost, rates, taxes and insurance vary and are not shown.
The packet includes the 2026 conforming limits, the HomeReady and Home Possible income check, the PMI removal rules, a document checklist and a vetted lender match.
What works
- 3% down through HomeReady, Home Possible or the standard 97% loan.
- PMI can be removed at 80% and ends automatically at 78% of the original value.
- High 2026 limit: $832,750 for one unit.
- HomeReady and Home Possible use reduced mortgage insurance coverage above 90% loan-to-value.
- 5% down on owner-occupied 2 to 4 units through Fannie Mae's Desktop Underwriter.
What it costs you
- Seller concessions are capped at 3% above 90% loan-to-value, half of FHA's 6%.
- The 3% tier has limits: income caps for HomeReady and Home Possible, a first-time buyer for the standard 97%.
- HomeReady's 3% down tier is one-unit, fixed-rate only.
- PMI applies until the loan reaches the removal points.
The part nobody explains.
HomeReady cuts required mortgage insurance coverage to 25% at 90.01% to 97% loan-to-value, compared with 30% to 35% on standard loans.
Since November 18, 2023, Fannie Mae allows 5% down on owner-occupied 2 to 4 unit homes through Desktop Underwriter. Before that, 2 units needed 15% down and 3 to 4 units needed 25%.
On a purchase, Fannie Mae counts 75% of gross rent from the other units toward qualifying income.
PMI comes off no later than the loan's midpoint, even if the balance has not reached 78%, as long as the loan is current.
Seller concession caps rise with the down payment: 3% above 90% loan-to-value, 6% from 75.01% to 90%, 9% at 75% or less.
Get the packet.
The official links are not on this page on purpose. They come in one email, organized, with what to do with each one and in what order.
- The packet includes the 2026 conforming limits, the HomeReady and Home Possible income check, the PMI removal rules, a document checklist and a vetted lender match.
- Every official link for this program, plus the links for every guide you explored here
- A match with a Texava-vetted lender who closes this program
- A direct reply from Albert in English or Spanish
Where should I send it?
Your packet is on its way.
Every guide you explore before you leave gets added to the next packet. Keep reading below.
Programs stack.
My Choice Texas Home adds 2% to 5% down payment assistance on Fannie HFA Preferred and Freddie HFA Advantage conventional loans, with no first-time buyer requirement.
Bank grant / DFW7.2Wells Fargo Homebuyer Access grantThe Wells Fargo Homebuyer Access grant of $10,000 works only with a Wells Fargo fixed-rate conventional loan.
Guide / Credit to keysMortgage credit guideConventional lenders pull all three bureaus and may use Classic FICO or VantageScore 4.0, open to all lenders since September 9, 2026.
Side by side.
The Texava Score weighs what matters to a buyer: cash saved 40%, ease to qualify 25%, speed and paperwork 15%, fewer strings 20%.
Asked most.
Who can get 3% down on a conventional loan?+
Buyers with income at or below 80% of area median income through HomeReady or Home Possible, or any buyer on a standard 97% loan when at least one borrower has not owned a home in the last 3 years.
When does PMI go away?+
The borrower can request removal at 80% of the original value with good payment history. It ends automatically at 78% if the loan is current, and no later than the loan's midpoint.
What is the 2026 conforming loan limit?+
$832,750 for one unit, up $26,250 from 2025. In DFW counties, $1,066,250 for 2 units, $1,288,800 for 3 and $1,601,750 for 4.
How much can the seller pay toward closing costs?+
On a principal residence: 3% above 90% loan-to-value, 6% from 75.01% to 90%, and 9% at 75% or less.
The value compounds.
3.5% down with a 580 score
Read nextMy Choice Texas HomeDPA with no first-time rule