Buying your first home just got easier. The Zero MI 3/6 mortgage from Federal Hill Mortgage lets you purchase with only 3% down, no private mortgage insurance (PMI), and up to 6% seller concessions. It’s a conventional loan designed to lower monthly payments while keeping your offer strong in competitive markets.
What is the Zero MI 3/6 Mortgage?
The Zero MI 3/6 is a conventional home loan with 3% down, no PMI, and up to 6% seller help. Unlike FHA or standard conventional mortgages, this program removes PMI entirely, which can save buyers $100 to $300 per month depending on loan size.
You get all the strength of a conforming loan without the usual trade-offs that come with low down payments.
How does it compare to FHA and standard 3% down conventional loans?
Here’s how the Zero MI 3/6 stacks up against other popular options:
- FHA loans: Require 3.5% down, come with permanent mortgage insurance, and typically result in higher monthly costs.
- Standard conventional 3% down: Requires PMI until you reach 20% equity.
- Zero MI 3/6: Just 3% down, no PMI required, and up to 6% seller-paid costs.
Here’s a real example: According to Bankrate, PMI typically costs 0.5% to 1.5% of the loan amount annually. On a $350,000 home, that translates to $145 to $437 added to your monthly payment.
Can sellers really pay 6% of my costs on a conventional loan?
Absolutely. The Zero MI 3/6 allows sellers to contribute up to 6% of the purchase price toward:
- Closing costs
- Interest rate buydowns
- Repairs (limited to actual costs and prepaids)
This flexibility makes your offers more competitive without completely draining your savings account.
Who qualifies for the Zero MI 3/6 loan?
You may qualify if you meet these straightforward requirements:
- Credit score: 620 or higher
- Occupancy: Primary residence only
- Income: Must be 80% or less of Area Median Income (this requirement is waived in low/moderate income census tracts)
- Loan amounts: Up to $806,500 ($1,209,750 in high-cost areas)
- Property types: Single-family homes, condos (warrantable), or PUDs (manufactured homes aren’t eligible)
- Homebuyer education course required
How does Zero MI 3/6 help first-time buyers in Maryland, DC, Virginia, and Delaware?
This program is especially valuable for first-time homebuyers throughout the Mid-Atlantic region:
- Maryland: Works beautifully alongside state programs like Maryland SmartBuy and First-Time Advantage.
- Washington, DC: Helps your offers stand out in highly competitive bidding wars.
- Virginia: Provides crucial PMI relief in expensive Northern Virginia markets.
- Delaware: Lets first-time buyers compete with conventional strength while reducing upfront costs.
When you combine local assistance programs with the Zero MI 3/6, many buyers find they can enter the market sooner with a more manageable monthly payment.
How to apply for the Zero MI 3/6
Getting started is simpler than you might think:
- Complete a homebuyer education course
- Gather your income and credit documentation
- Get pre-approved with Federal Hill Mortgage
FAQs About the Zero MI 3/6 Loan
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Does 3% down always require PMI?
No. The Zero MI 3/6 program removes PMI, even with just 3% down.
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Can seller concessions cover repairs?
Yes, as long as they don’t exceed actual costs and prepaids.
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Is this loan available everywhere?
It’s currently available in Maryland, DC, Virginia, and Delaware.
Why Choose Federal Hill Mortgage?
At Federal Hill Mortgage, we specialize in first-time buyer programs that remove common barriers like high down payments and PMI. With the Zero MI 3/6, you can finally purchase a home without having to make the usual compromises.
Explore the Zero MI 3/6 Mortgage today
