Home Buyers Could Soon Get $1 Million Mortgage With 3% Down Payment

To qualify for a $1 million mortgage, Americans typically have to make a down payment of at least 20% of the home’s price. Starting next year, some buyers could put as little as 3% down.

The cap for home loans backed by Fannie Mae and Freddie Mac rises to $1,089,300 next year in a few expensive markets including Los Angeles and New York, up from $970,800, the Federal Housing Finance Agency, or FHFA, said Tuesday. The higher limit means borrowers can qualify for bigger loans without needing to take out jumbo mortgages, which aren’t federally backed and have more-stringent requirements for income, credit and down payments.