Loan Programs

Government Loans

FHA LOANS

The Federal Housing Administration was created in 1934 in an effort to bolster homes sales during the Depression. By financially guaranteeing loans, the FHA lifts much of the risk of non-payment and foreclosure from private lenders. It is important to remember that the FHA is not a lender; they just guarantee your loan.

Advantages

    Bankruptcy not an automatic disqualification

    Lower interest rates

    Down payment is less

    Lower mortgage points and other closing cost requirements

    Resale can be made more quickly

    Is backed by the U.S. government

Features

    Down payment required

    Higher upfront Mortgage Insurance Premium (MIP) than on conventional loans but monthly MIP is lower

    Loan Limits are lower than conventional

    MIP required regardless of the Loan-to-Value (LTV)

VA LOANS

A VA loan is a mortgage loan guaranteed by the Veterans Administration. It was created in 1944 and signed into law by President Franklin D. Roosevelt. A VA loan provides veterans and/or their surviving spouses who have not remarried, with a federally guaranteed home with zero down payment. The program, also referred to as the GI Bill, has been highly successful and has helped millions of American veterans and their families acquire a home.

Advantages

    No down payment

    VA does not require private MIP

    Limit on the amount of origination fees and closing costs that the lender can charge

    Limit also placed on appraisal fees

Features

    Borrower with eligibility remaining must have a Certificate of Eligibility from the VA

    VA does not require private MIP

    Borrowers are required to make a one-time funding fee based on loan amount and applicant’s service length

    Closing costs can be paid by the lender and the seller

USDA LOANS

The USDA Rural Housing Service has various programs available to aid low- to moderate-income rural residents to purchase, construct, repair, or relocate a dwelling and related facilities. USDA Rural Housing loan programs allow qualified homebuyers 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

    Closing costs can be added to the loan amount (if the property appraises high enough to include it at up to 102% of the appraised value)

    Loan government guarantee fee with no monthly guarantee fee

    Low interest rates

    Applicants with a wide range of credit profiles may qualify

    Income eligible applicants who do not qualify for conventional financing may qualify

    Families & individuals that have minimal funds for a down payment and closing costs includes first time homebuyers and repeat homebuyers

    Seller concessions – 6% max

    No cash reserve requirement

    No Non-Allowable costs

    No First Time Homebuyer Requirement

    30 Year Loan @ competitive fixed rate

    No limit on gift funds

Features

    Property must be in very good condition and have a high insulation R-factor

    You can not make over 50% of 115% of the median county income to qualify

    Must be able to verify income limits

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