The federal government wants to help you buy a home. They see it as a
way to improve the economy, provide a stable tax base, and help grow
communities. To encourage homeownership, the federal government backs
loans for those who might have trouble qualifying for a conventional
loan.
Loans For Low To Moderate Income Buyers
The Federal Housing Administration (FHA), an agency of the Department
of Housing and Urban Development (HUD), provides several mortgage loan
programs for low to moderate income home buyers. FHA loans offer market
rates with a lower down payment requirement.
FHA loans require a minimum down payment of 3%, cash to close the loan,
and an acceptable credit score. Closing costs can be part of the loan
amount, and credit score requirements vary with programs.
To apply for a FHA loan, you must submit an application with a HUD
approved lender. Most traditional lenders already are approved by HUD.
Loans For Veterans
Loans guaranteed by the Department of Veterans Affairs (VA) are
available to most veterans and service persons. Usually these types of
loans do not require a down payment and have more favorable loan terms.
VA loans do not have a maximum amount, but lenders typically limit the
loan amount to $359,650, the conforming rate.
To apply for this type of loan, you must be qualified by the VA. Once
they approve your application and verify your qualifications, they will
issue you a certificate which you present to a traditional mortgage
lender as part of your application paperwork.
Loans For Rural Residents
The Department of Agriculture also backs loans through its Rural
Housing Service (RHS). RHS loans require no down payments, but you must
be able to afford monthly mortgage payments and have an acceptable
credit history.
RHS also offers direct loans to low income family, those with income
80% or less than the area’s average income and cannot get credit from
financing companies. These mortgage loans can be extended to 38 years
and require no down payment.
Apply For Government Assistance
Government mortgage loan programs enable you to avoid mortgage
insurance and secure financing to buy a home. These programs are
offered through traditional lenders, which can easily be found online.
To view our list of recommended lenders online for government backed
mortgage financing, visit this page:
http://www.abcloanguide.com/govloans.shtml.
