Government

FHA Loans

The Federal Housing Administration was established in 1934 to help increase home sales during The Great Depression. In current times the FHA's role is to financially backs home loans to mitigate much of the risk of non-payment and foreclosure from private lenders. It is pertinent to note that the FHA is NOT a lender, but a governement entity created to guarantee your loan.

Advantages:

  • Smaller down payment.
  • Less restrictive credit requirements.
  • Bankruptcy does not automatically disqualify potential borrowers.
  • Backed by the federal government of USA.

Program Features:

  • Down payment required.
  • Loan amounts are limited and lower than conventional.
  • MIP (Mortgage Insurance Premium) is required regardless of LTV (loan-to-value).
  • Higher MIP (Mortgage Insurance Premium) than on conventional loans.

VA Loans

A VA loan is a residential mortgage loan that is guaranteed by the Veterans Administration. Established in 1944 by the US, VA loans provide veterans and/or their surviving spouses with a governement guaranteed home loan with NO down payment. This program, also known as the GI Bill, has been instrumental in assisting millions of American Veterans and their families qualify for lower cost home loans.

Advantages:

  • No down payment.
  • No private MIP (Mortgage Insurance Premium) requirement.

Program Features:

  • Borrower must have a Certificate of Eligibility from the VA.
  • Closing costs are paid by the lender and the seller (seller may elect not to contribute to closing costs).
  • Borrowers are required to make a one-time funding fee based on loan amount and borrower's service length.

USDA Rural Loans

The USDA Rural Housing Service has various programs to offer assistance to low-to-moderate income rural residents for purchase, construction, repair, or relocation of a dwelling and related facilities. USDA rural housing loan programs allow qualified home-buyers to get loans with minimal closing costs and no down payment.

Advantages:

  • No Down Payment requirement.
  • Property must be located in an eligible rural area (moved up from disadvantages)
  • Closing Cost can be added into the loan (if the property appraises high enough to include it at up to 102% of the appraised value).
  • Includes first time home-buyers.
  • May include repeat home-buyers.
  • Loan government guarantee fee and not monthly guarantee fee.
  • Applicants may have a wider array of credit profiles.
  • Families and individuals that have minimal funds for a down payment and closing costs benefit from lower costs.
  • Seller concessions - 6% max.
  • No first time home-buyer requirement.
  • No limitation on gift funds.
  • No cash reserve requirement.

Program Features:

  • Property must be in very good condition and have a high insulation R-factor.
  • Must be able to verify income limits.
  • Can not make over 50% of 115% of the median county income to qualify.

DISCLOSURE ABOUT LOAN QUALIFICATION

Not all applicants will qualify. Please meet with a licensed loan originator for more information. Rates, fees, terms, and programs are subject to change without notice. Not all loans, loan sizes, or products may apply. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet loan-to-value requirements, and final credit approval. Approvals are subject to underwriting guidelines and program guidelines and are subject to change without notice.