Under current federal rules for insured mortgages, what is the minimum down payment for a home with a purchase price of $1,200,000?
Correct Answer
A) $95,000
Homes priced from $500,000 up to $1.5 million need 5% of the first $500,000 ($25,000) plus 10% of the portion above $500,000 (10% of $700,000 = $70,000), for a total of $95,000. The 20% minimum now applies only at $1.5 million or more.
Why This Is the Correct Answer
$25,000 + $70,000 = $95,000 under the tiered minimum for homes below $1.5 million.
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