If you’re lucky, you’re paying $1,800 a month in rent. That’s $21,600 a year going to waste with nothing to show for it. Meanwhile, you’ve been trying to save for a down payment, but every time you get close, something comes up: car repairs, medical bills, or rent increases that eat into your savings. The traditional advice to “just save 20% down” feels impossible when that means scraping together $50,000 or more.
What if you could become a homeowner with a 1% down payment and get help with the rest? American Pacific Mortgage’s 1% Home program makes homeownership accessible with as little as 1% down plus a 2% lender grant, putting you in your own home with just 3% total down payment.
The Reality of Today’s Housing Market
Homebuyers face real challenges right now. Home prices remain high in many markets, and saving for a traditional down payment can take years. That is the time when your monthly rent payment could have been going toward your equity. Many potential buyers believe they need 20% down to buy a house, which simply isn’t true. Others worry that programs designed to help them will come with catches, restrictions, or mountains of paperwork.
The 1% Home program addresses these concerns head-on by reducing the biggest barrier to homeownership: the down payment.
How the 1% Down Payment Program Works
Here’s what makes this program different. You contribute just 1% of the home’s purchase price as your down payment. American Pacific Mortgage then provides a 2% grant (capped at $4,500) to help you reach a 3% total down payment. This means you start with 3% equity in your home from day one.
Let’s look at a real example. Say you’re buying a $225,000 home:
- Your 1% down payment: $2,250
- APM’s 2% grant: $4,500
- Total down payment: $6,750 (3% of purchase price)
You walk into closing having contributed $2,250 of your own money, but you gain 3% equity in your home immediately. That’s real wealth building from the start.
If you’ve managed to save a bit more, you can contribute up to 3% yourself and still receive the full 2% grant from APM. On that same $225,000 home, you could put down $6,750 yourself, receive the $4,500 grant, and reach a 5% down payment. Either way, you benefit from the lender grant that reduces your upfront costs.
Who Qualifies for the 1% Home Program?
This program serves buyers at or below 80% of their area’s median income. What does that mean in practical terms? The income limit varies by location, but here’s how it works: If the median household income in your county is $75,000, you’d need to earn $60,000 or less annually to qualify (80% of $75,000). In areas with higher costs of living, these limits adjust upward accordingly.
You’ll need a credit score of at least 620. If you’re close but not quite there, consider working with a credit counselor to address any issues on your report. Many buyers can improve their scores significantly in just a few months with focused effort.
The program requires:
- A minimum credit score of 620
- Income at or below 80% of your area’s median income
- Purchase of a single-family home (not a duplex, triplex, or fourplex)
- Use of the property as your primary residence
- A conventional loan with a maximum amount of $275,000
Here’s what makes this program more accessible than many others: You don’t have to be a first-time homebuyer. Whether you’re buying your first home or you’ve owned property before, you can qualify. The program also has no location restrictions, so you can buy a home anywhere in the country where we offer lending services.
New construction homes qualify under this program too, which opens up additional inventory in markets where existing homes are scarce.
Understanding Your Total Costs
The 1% down payment sounds small—and it is—but savvy buyers want to know about the complete financial picture. Beyond your down payment, you’ll need money for closing costs, which typically range from 2% to 5% of the purchase price. On a $225,000 home, expect closing costs between $4,500 and $11,250.
Here’s where the seller can help. The 1% Home program allows sellers to contribute toward your closing costs, including funding an interest rate buydown of up to 3% of the purchase price. This could mean the seller pays several thousand dollars toward your closing costs, further reducing the cash you need to bring to the table.
An interest rate buydown is particularly valuable. Your seller can pay money upfront to reduce your interest rate for the first few years of your loan. This strategy, often called a 2-1 buydown or 3-2-1 buydown, can save you hundreds of dollars monthly during the early years of homeownership when budgets are tightest.
Private mortgage insurance (PMI) will apply to your loan since you’re putting down less than 20%. PMI protects the lender if you default, and it typically costs between 0.5% and 1% of your loan amount annually. On a $218,250 loan (after your 3% down payment on that $225,000 home), you might pay $90 to $180 monthly for PMI. The good news? Once you reach 20% equity in your home through payments and appreciation, you can request PMI removal.
Why a 1% Down Payment Makes Sense Now
Waiting to save a larger down payment has real costs. Suppose you’re currently paying $1,800 in rent and could have a mortgage payment of $1,600 (including PMI, taxes, and insurance). In that case, you’re losing $200 monthly by renting—plus missing out on equity building and potential appreciation.
Consider this scenario: You continue renting for three more years to save an extra $15,000 for a larger down payment. During those three years, you pay $64,800 in rent with nothing to show for it. If home prices increase even 3% annually during that time, the $225,000 home now costs $245,760. You’ve actually lost ground despite saving more money.
The 1% Home program lets you stop paying rent and start building equity today. Every mortgage payment increases your ownership stake in your home. Over time, your home may appreciate in value, creating wealth you can tap through a cash-out refinance or profit from when you sell.
The Path Forward: Your Next Steps
Understanding the program is the first step. Now you need to know if you qualify and what your actual payments would look like. Start by calculating 80% of your area’s median income to see if you fall within the income limits. You can find this information through the Fannie Mae website or by connecting with my team.
Check your credit score using free services from your bank or credit card company, or request your free annual credit report. If you’re at or above 620, you meet the minimum. If you’re below, don’t give up. Find out what’s pulling your score down and address those issues.
Calculate how much you’d need for your 1% down payment on homes in your price range. Remember, the maximum loan amount is $275,000, so you’re looking at homes up to approximately $284,000 (accounting for your down payment). Your 1% contribution would range from $2,000 to $2,840 depending on the home price.
Our team can provide personalized guidance based on your situation. We’ll help you understand the exact income limits for your area, calculate your estimated monthly payments including PMI, and explain how seller concessions could reduce your closing costs. This consultation costs nothing and gives you the information you need to make a confident decision.
Breaking Free from Renting
The dream of homeownership doesn’t require perfect credit or massive savings. It requires taking that first step and exploring what’s possible. The 1% Home program exists specifically to help people like you: hardworking individuals and families who have been locked out of homeownership by down payment requirements.
You gain stability that renting can never provide. Your monthly housing payment becomes predictable with a fixed-rate mortgage, while rent increases become someone else’s problem. You have the freedom to paint walls any color, renovate your kitchen, adopt a pet, or plant a garden. You build equity that becomes generational wealth for your family.
No prepayment penalties mean you have flexibility for the future. If interest rates drop, you can refinance. If your income increases, you can pay extra toward your principal and build equity faster. If you need to sell and move, you own that home and can profit from any appreciation.
Making Homeownership Accessible
The 1% Home program creates opportunities for underserved communities and individuals who work hard but haven’t had access to traditional financing paths. We believe homeownership should be achievable for everyone willing to meet the basic requirements, not just those with substantial savings accounts.
This program represents our commitment to opening doors that have been closed for too long. We’ve helped thousands of families transition from renting to owning, and we’ve seen firsthand how homeownership transforms lives and strengthens communities.
Your situation is unique, and you deserve personalized guidance about whether this program fits your needs. Connect with my team today to learn more about the 1% Home program and take your first step toward homeownership. The home you’ve been dreaming about may be more within reach than you realized.