Helping Military and Civilian families realize the dream of homeownership since 1990

Laura Borja- Home Loan expert- NMLS 199107

Down Payment

Only assets derived from acceptable sources are allowed for down payment, closing costs and cash reserves*

Minimum down payment required is based on credit the score , the occupancy and the  property type.

Below is a look at the standard down payment requirements for agency loans.


Jumbo (non-conforming) and portfolio lending have different requirements.

There are two categories of closing costs:

Non-recurring and recurring (aka pre-paids) costs.


Non-recurring closing costs happen one time as part of the transaction.  These costs can vary depending on the area of the country but here are some examples of the typical costs you might see.

  • Appraisal
  • Credit report
  • Underwriting fee
  • Termite Report (Refinances)
  • Notary fee
  • Title Insurance
  • Flood determination
  • HOA processing fees
  • County Recording Fees

Recurring Closing Costs, or prepaids, refers to costs incurred as part of homeownership. Some examples would include


•Homeowner’s insurance premium

•Prepaid interest on the loan

•Property taxes due at closing

Property tax and insurance impounds

Transaction Type Number of Units Min Down Payment
Principal Residence

Purchase or
No Cash out Refinance
1 Unit Fixed Rate:3%**
ARM: 5%
2 Unit Fixed Rate/ARM: 15%
3-4 Units Fixed Rate/ARM: 25%
Cash Out Refinance 1 Unit Fixed Rate/ ARM: Min 20%
Second Home
Purchase or
No Cash out Refinance
1 Unit Fixed Rate/ARM: 10%
Cash Out Refinance 1 Unit Fixed Rate/ ARM: Min 25%
Investment Property

1 Unit Fixed Rate/ARM: 15%
2-4 Units Fixed Rate/ARM: 25%
No Cash Out Refinance 1-4 Units Fixed Rate/ ARM: Min 25%

Cash out Refinance
1 Unit Fixed Rate/ ARM: Min 25%
2-4 Units Fixed Rate/ ARM: Min 30%
**High balance loans (those exceeding $453,100 but below the set county limit) require a minimum of 5% down for 1 unit owner occupied properties.

Cash Reserves

Cash reserves are funds available to the buyer after the mortgage closes.


The amount required varies depending the transaction type, occupancy, property type and the number of other financed property the buyer already owns.


For loans obtaining an automated loan approval, cash reserves are determined by the underwriting system.

Typically they are only required on second homes, investment properties or if you own other properties that are financed.

Closing costs

Real estate and mortgage transactions have fees associated with them, regardless of the type of financing involved.


The amounts charged will vary depending on the location of the property, the time of the year the loan closes and the fees charged by 3rd party providers.

Allowed Sources of Funds

Source Down
Buyer's own funds: checking, savings, retirement,investments and cash on hand.
Loans against financial assets such as other real estate, retirement and investment accounts and other depository accounts.
Proceeds from the sale of real estate and other personal property.
Gift funds: must be from a family member, employer, government agency or charitable organization. A gift letter must be signed by the donor and the transfer of the funds must be documented.
Seller Credit**
Lender Credit
**Interested party contributions include credits towards closing costs and other loan fees which are paid by the seller, real estate agents, builders and developers. The amounts are based on a percentage of the sales price
Occupancy Type LTV/CLTV Max Contribution
Principal Residence
or second home
Over 90% 3%
75.01-90% 6%
75% or less 9%
Investment property All LTVs 2%

Non-Allowable Sources of Funds

  • Unsecured signature loans
  • Cash advances on credit cards
  • Borrowing against any non-real estate property such as vehicles, furniture, jewelry and household goods
  • Any and ALL funds derived from illegal sources

This overview is not all inclusive and does not include all guidelines or potential qualifying situations. Contact us or your lender for additional information that applies to your situation.

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Laura Borja  | Senior Mortgage Consultant | NMLS#199107

Cell: (619) 992-4061

27271 Las Ramblas ste 350  Mission Viejo CA 920691

This website is not authorized by the New York State Department of Financial Services to accept mortgage loan applications for properties located in New York. Intended for California Consumers Only.




Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107
Laura Borja- Home Loan expert- NMLS 199107