The old rule says to save twenty percent before you buy. It sounds responsible, but on a $225,000 home that is $45,000. For a household paying rent, covering childcare and trying to stay ahead of a car payment, that number can take a decade to reach.
The IMS 1% Down Mortgage Program was created to close that gap. You put down 1%. Your lender contributes another 2%. That gives you 3% equity at closing, a 30-year fixed rate, and an option with no monthly mortgage insurance. It is one of the most efficient ways we know to turn steady rent payments into ownership.
What 1% down looks like in real dollars
The best way to see the value is to compare it with the down payments most buyers assume they need. Here is the cash due for the down payment alone on a $200,000 home.
| Feature | 1% Down Program | FHA at 3.5% | Conventional at 20% |
|---|---|---|---|
| Your down payment | $2,000 | $7,000 | $40,000 |
| Lender contribution | $4,000 (2%) | None | None |
| Equity at closing | 3% | 3.5% | 20% |
| Monthly mortgage insurance | Option with none | Yes, for most borrowers | None |
Closing costs and prepaids are separate from the down payment, and they still matter. We look at all of it together and, where it helps, pair this program with seller concessions to keep your total cash to close as low as possible.
Who the 1% Down program fits best
This program works well for dependable earners who have good habits but not a large savings account yet.
- Renters already paying close to what a mortgage payment would be
- Buyers who want to keep an emergency fund after closing instead of emptying it
- People early in their careers with steady income and limited savings
- Households in areas that fall within the program's income guidelines
Income limits depend on where you buy
Eligibility for the lender contribution is tied to area income. In practical terms, location determines the income limit, and those limits are set using Fannie Mae's area guidelines. Some Iowa neighborhoods have no effective income cap for this program, while others do. The fastest way to know is to send us the address, or the part of town you are shopping, and we will check it.
Why waiting can cost more than starting
Every year of rent builds equity for a landlord and not for you. If the monthly payment on a home you like is close to your rent, the real question is not whether you can afford a house. It is whether you can afford to keep waiting while you save a down payment you may not need. A quick call will tell you which side of that line you are on.
1% Down program guidelines
- 620 minimum credit score
- Ability to put down 1% of the price
- Income within the limit for the property's area
- 30-year fixed rate loan
- Primary residence
- Verifiable income and employment
The lender contribution and program terms are set by the lender and can change. We confirm current details for your area before you apply.
