Government loan programs
An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA loan programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.
FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally lower than conventional mortgage rates.
Some of the other benefits of FHA financing:
- Only a 3.5 percent down payment is required.
- Down Payment can be Gifted
- Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
- More flexible underwriting criteria than conventional loans
- Loans are assumable to qualified buyers.
VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with conventional loans.
Other benefits of a VA loan include:
- Closing costs are comparable and sometimes lower - than other financing types.
- No private mortgage insurance requirement.
- The Mortgage can be assumed(Restrictions apply) by the buyer when a home is sold.
- Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.
Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount. A veteran on Disability is Exempt from the Funding Fee.
Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility will be obtained from the VA by the lender.
I appreciate our Military and am grateful to our Veterans for their Service. I have taken the extra step and have been Certified as a Military Home Specialists.
Looking for a VA Loan, I am here to help! Call me at 623-202-3142.