Two of America’s largest lenders are now offering home loans that require just 1% down amid sky-high interest rates.

Last month, the nation’s largest home mortgage lender, United Wholesale Mortgage, announced it would begin offering loans requiring down payments of only 1% of the home’s sale price.

The move was followed by fellow lender Rocket Mortgage, which announced this week the launch of a similar program called One+.

Both lenders are expected to kick in an additional 2% of the home’s sale price, so that each borrower would have at least 3% down.

“It’s a really good way to expand homeownership for families that otherwise may not be able to get a hold of the American dream,” David Stevens, CEO of Mountain Lake Consulting, a company that provides services to the mortgage industry and does not work with United Wholesale Mortgage or Rocket Mortgage, told Realtor.com.

“One unfortunate reality for homeownership is saving up for a down payment can be pretty tough,” he added. “Oftentimes it ends up excluding families with more diverse backgrounds.”

The loans are income-restricted, and only cater to lower- and moderate-income borrowers. In addition, borrowers still need to have high enough credit scores, stable income and low enough debt to be considered for the loans.

For the United Wholesale Mortgage and Rocket Mortgage loans, buyers must have credit scores of at least 620 and cannot earn more than 80% of their area median income.

As an example, if the typical local family in a region earns $100,000, then the borrowers there can’t make more than $80,000 a year.

Those seeking the One+ mortgage must purchase a single-family home. And the United Wholesale Mortgage conventional 1% down loan is available only through mortgage brokers.

“The buyer still has to qualify for whatever that [monthly] payment is,” Stevens added.

On the other side of the coin, however, risks associated with exceedingly low down payments can be high.

Buyers who don’t make larger down payments could find themselves owing more on their mortgages than their homes are worth.

“Making it easier for everybody to get a mortgage with only 1% is like putting candy in front of a baby,” mortgage lender Shmuel Shayowitz, president and chief lending officer at Approved Funding in River Edge, New Jersey, told Realtor.com.

“People who should not be buying homes will be encouraged and enabled to buy homes.”