Government Loan Programs

Federal Housing Administration (FHA) Loans

FHA mortgage programs are offered to all homebuyers. These programs are intended to assist low-income and moderate-income families that do not meet the requirements for any conventional loans. The FHA loan programs are mainly of assistance to the homebuyers that do not have a lot of money available to them.

FHA loan benefits:

Only requires a 3% down payment.
Provides buyers with the ability to pay for their closing costs.
FHA set boundaries on the amount of money the lenders can charge the buyer for some closing cost fees (for instance, origination should be no more than 1% of mortgage total).
Maximum mortgage amount may differ quite a bit by area. FHA adjusts this amount from time to time on the basis of certain changing economic circumstances. It is advised that you check with your local FHA office or approved lender to figure out your maximum mortgage amount.
Under some conditions, the automatic cancellation of the FHA mortgage insurance premium is available.

Department of Veteran Affairs (VA) Loans:

VA loan programs are accessible to qualified veterans who want to purchase a home. These types of loans persuade lenders to offer loans to veterans because they are protected by the VA's guarantee in the case that the borrower is not able to make the payments and this way the lender does not lose any money. VA loans are especially useful to the veterans that do not have much money available to them. The guidelines of these loans permit higher debt and front-end ratios in comparison to any other loan programs.

VA loan benefits:

There is no down payment requirement.
More beneficial interest rates are often offered by lenders because of the fact that the Department of Veteran Affairs guarantees assisting with the loan.
Provides buyers with the ability to pay for the funding fee.
There are no mortgage insurance premiums.
The maximum loan amount can be 100% of appraised value of the home, which is figured out by a VA-approved appraiser or it is up to four times the VA eligibility entitlement, which is at the present time $50,750 with a maximum loan amount of $200,300.