Rocket Mortgage vs United Wholesale Mortgage - Comparing 1% Down Payment Programs

Have you ever wanted to buy a home but felt like the down payment was too much to save up? You're not alone.

A recent survey from Bankrate showed that 4 out of 10 people who want to buy a house feel the same way. They worry about the upfront costs, like the down payment and closing costs.

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Well, good news! Companies like Rocket Mortgage and United Wholesale are making it easier than ever before to buy a home without worrying about upfront costs.

Both have programs that allow you to buy a home with just 1% down. In this article, we'll compare these two programs to help you understand which one might be best for you.

ONE+ by Rocket Mortgage Explained

Rocket Mortgage’s ONE+ program lets qualified borrowers put down as little as 1% of the home’s price.

Rocket Mortgage also adds 2% to the down payment. If you choose to put more than 1% down, you can add up to 2.99%. With Rocket’s extra 2%, your total down payment could be up to 4.99%.

To qualify for this program, your income must be below 80% of the median income in the area where you’re buying. Your credit score should be at least 620. The property you’re buying must be a single-unit primary home, which includes condos, single-family homes, and manufactured homes.

Bob Walters, former CEO of Rocket Mortgage, says the ONE+ program helps people buy homes in a competitive market with limited available houses.

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Conventional 1% Down by United Wholesale Mortgage Explained

United Wholesale Mortgage (UWM) offers its Conventional 1% Down program, allowing borrowers to put down just 1% of the home’s price. UWM then adds another 2% to the down payment, with a maximum contribution of $4,000, bringing the total down payment to 3%.

The goal of this program is to help homebuyers reach that 3% down payment faster by providing extra funds.

For example, if you purchase a $300,000 home with the Conventional 1% Down mortgage, your 1% down payment would be $3,000, and UWM would add an additional 2%, or $6,000. This makes your total down payment $9,000. With a 30-year fixed loan at a 6% interest rate, your monthly principal and interest payment would be $1,745.

To qualify for UWM’s Conventional 1% Down program, your income must be at or below 50% of the Area Median Income (AMI), and the loan-to-value ratio (LTV) should be 97%. UWM designed this program to give independent mortgage brokers a way to offer better deals to homebuyers.

Mat Ishbia, UWM’s CEO, highlights that their goal is to make the home buying process faster and more affordable for borrowers.

Verify Your 1% Down Home Purchase Eligibility

Comparing Rocket Mortgage's ONE+ vs. UWM's Conventional 1% Down

Here are the key differences between Rocket Mortgage’s ONE+ program and UWM’s Conventional 1% Down program:

• Down Payment Contribution

  • Rocket Mortgage: You can put down 1% to 2.99%, and Rocket will add 2%. The total down payment can be up to 4.99%.
  • UWM: You put down 1%, and UWM adds 2%, but no more than $4,000. This makes the total down payment 3%.

• Income-Related Eligibility

  • Rocket Mortgage: You must have an income below 80% of the median income in the area where you are buying.
  • UWM: You must have income at or below 50% of the Area Median Income (AMI).

• Credit Score Requirement

  • Rocket Mortgage: You need a credit score of at least 620.
  • UWM: They haven’t specified a credit score requirement.

• Property Eligibility

  • Rocket Mortgage: You can buy a single-unit primary home, such as a condo, single-family home, or manufactured home.
  • UWM: They haven’t provided details on property types.

• Maximum Contribution

  • Rocket Mortgage: There is no limit on Rocket’s 2% contribution.
  • UWM: Their 2% contribution is capped at $4,000.

• Program Aim & Accessibility

  • Rocket Mortgage: The ONE+ program helps homebuyers in competitive housing markets.
  • UWM: The Conventional 1% Down program makes homeownership more affordable and helps independent mortgage brokers.

Verify Your 1% Down Home Purchase Eligibility

Which Program We Think Is Better

Both programs let you put down only 1%.

Rocket Mortgage allows a larger total down payment of up to 4.99% compared to UWM’s 3%.

UWM’s 2% contribution is capped at $4,000, so homes priced over $200,000 may see limited benefit. Rocket Mortgage does not have such a cap.

Rocket Mortgage has a higher income limit, allowing more people to qualify. UWM is stricter with a 50% income limit.

In short, Rocket Mortgage’s ONE+ program offers more flexibility and higher down payment options. But the right choice depends on your specific situation. Talk to a financial advisor to see which one works best for you.

Verify Your 1% Down Home Purchase Eligibility

Lower Down Payment Alternatives

There are other options if you're looking to minimize your upfront payment:

• FHA Loans: These loans let you put down as little as 3.5% with more lenient credit requirements.
• USDA Loans: Offer 100% financing for homes in rural areas, meaning no down payment is required.
• VA Loans: Available to eligible veterans and military members, these loans require no down payment and offer low interest rates.
• HomeReady by Fannie Mae: Allows down payments as low as 3% and accepts non-traditional income sources, like rental income.
• Conventional 97 by Fannie Mae: Lets you put down 3%, with no specific income limits.
• Freddie Mac’s Home Possible Mortgage: Offers a 3% down payment option and accepts various income sources, such as family contributions.

Verify Your 1% Down Home Purchase Eligibility

Bottom Line

Rocket Mortgage and United Wholesale Mortgage (UWM) both offer programs to help you buy a home with just 1% down.

Rocket Mortgage's ONE+:

• You can put down 1%, and Rocket adds 2%.
• The total down payment can be up to 4.99%.
• You need to have an income below 80% of the area’s median and a credit score of at least 620.

UWM's Conventional 1% Down:

• You put down 1%, and UWM adds 2% (capped at $4,000).
• Your income must be at or below 50% of the Area Median Income (AMI).

When comparing the two, Rocket Mortgage’s ONE+ offers more flexibility with higher down payment options and broader income eligibility.

But the best program for you will depend on your personal circumstances. Always talk to a financial professional to make the right choice for your situation.