Yes and no. But you might not want to.
Technically, there is no minimum mortgage loan amount. Fannie Mae, Freddie Mac, and others don't stipulate that you must borrow a certain dollar figure. But some lenders have minimum loan amounts - often $50,000.
Because of federal mortgage lending laws that are actually designed to protect you, the consumer.
Fannie Mae, Freddie Mac, and government mortgage loans (FHA / VA / USDA) are all what we call qualified mortgages. A qualified mortgage has certain features that make it more likely the consumer will be able to afford his loan payments. A qualified mortgage isn't allowed to have risky features like interest only payment options or terms longer than 30 years. If lenders issue qualified mortgages, they are also offered certain legal protections.
QM loans also limit the amount you can pay for your loan in points and fees. And those limits depend on the size of your mortgage loan. In 2017, the limits are as follows:
||Points & Fees Cap
| > $102,894
||3% of the loan amount
|$61,737 - $102,893
|$20,579 - $61,736
||5% of the loan amount
|$12,862 - $20,578
||8% of the loan amount
Not all costs associated with obtaining a loan are included in the points and fees cap. Typically, a lender would include the same costs included in calculating APR, with the exception of daily interest, mortgage insurance premiums, and bona fide discount points.
Let's say you're buying a $300,000 house and borrowing $240,000. Your "qualified points and fees" should come nowhere near the 3% cap. In fact all of your closing costs and prepaids would probably be less than 3% of your loan amount.
But what if you were borrowing $24,000? Your limit on "qualified points and fees" is $1,200 (5% of your loan amount). But the dollar figure of those qualified points and fees would likely be the same (or similar) as it would be for the $240,000 loan. The points and fees for your $24,000 loan could easily cost nearly 10% of the loan amount.
Many fees are fixed amounts - regardless of your loan amount. The certificate that determines whether or not you're in a flood zone is the same whether you're borrowing $10,000 or $1,000,000. Even the escrow or settlement charges are based on the purchase price - not the loan amount.