It is hoped the plan will boost the housing industry and help first time buyers who will only need a 5% deposit.
The scheme will run for three years for new properties up to £250,000.
The industry body, Homes for Scotland, is projecting that the new scheme could create or safeguard 22,800 new construction jobs and more than 650 apprenticeships.
The Scottish government and the construction industry have been working on the plan for some time.
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Twelve house builders have signed up to the scheme including Miller, Persimmon, Stewart Milne, Taylor Wimpey and Barratt.
The Nationwide and the Royal Bank of Scotland said they would also participate.
Homes for Scotland chief executive, Philip Hogg said: "As far as the prospective purchaser is concerned it is a 95% mortgage, the difference is what happens behind the scenes.
"The builder will contribute towards an insurance policy which will come into affect if the property has to be repossessed and there is a loss.
"So for the home buyer it is an opportunity to get back into the marketplace and help many thousands that are locked out of buying a new home at the moment."
The Scottish government which is guaranteeing the scheme predicts it will help 6,000 households.
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