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How these three government loans make home ownership possible from little to no money down


Buying a home is a step most adults want to take, but it is also a step that costs more and increases with time. When buying a home, it is essential to learn the process of buying a home. Unfortunately, not everyone has time to take a class buy a house 101 to know how you can buy a home and still save money.

Thankfully, Government guaranteed home loans still exist, and because the US Government guarantees them, these loans can be more tolerant when applicants meet the requirements for their eligibility.

There are three differences government mortgage loansThey all offer incentives depending on who the applicant is. The Federal Housing Administration (FHA), the United States Department of Agriculture (USDA), and the Department of Veterans Affairs (VA) administer these loans, offering significant benefits, making them increasingly attractive leads to more home buyers.

Home Loans by the Federal Housing Authority

Loans managed by FHA are perfect for first-time homebuyers who may not have the best credit score or who may not have the savings to pay off a 20% down payment. FHA loans also have a number of benefits that make these types of loans the best loans for homebuyers who have never owned a home before. These include benefits such as:

  • 3.5% prepayment.
  • Credit score is 580.
  • Reduce closing costs.
  • Reduce monthly mortgage payments.

FHA loans are available in both 15-year and 30-year fixed-rate mortgages. In addition, FHA home loans also give recently bankrupt applicants the opportunity to become homeowners.

Applicants who went through a Chapter 7 bankruptcy may be eligible for an FHA loan as long as they have two years left from the date of the bankruptcy settlement. In addition, Chapter 13 bankruptcy applicants can get a home loan as long as they are removed for one year from the date of discharge and approved by the court.

However, FHA loans are still required to comply with county loan limits that vary depending on the specific county’s cost of living.

US Department of Agriculture Home Loan

USDA home loans are intended to appeal to rural communities by helping low-income applicants achieve their dreams of home ownership. These loans are outstanding for lower income applicants who would otherwise not be able to take out a home loan. As a result, a number of benefits are available to those eligible for a USDA home loan. These benefits include things like:

  • $ 0 down payment required.
  • Reduce closing costs.
  • Competitive interest rates.
  • Flexible credit score requirements.

USDA loans also allow former bankruptcy owners to be homeowners, just like FHA loans. Although, unlike FHA loans, Chapter 7 recipients have to wait three years from discharge. These amounts can be reduced down to one year by using the “USDA Exceptions Waiver.” However, it does require applicants to prove that their bankruptcy was caused by an extenuating circumstance such as job loss or illness by providing documentary evidence.

USDA-administered home loans are for the purchase of a modest single-family home that does not pose any health or safety hazards. The house must be located in a rural development area. It is also subject to county loan limits, which in most countries are $ 285,000.

Loans for Veterans (VA)

Home Loans from the Department of Veterans Affairs

VA government loans are only available to Veterans, Active Service Members and eligible spouses. However, there are additional eligibility requirements required to qualify for a loan. These eligibility requirements include requirements for income, services, credit score, and assets that must be fulfilled.

These loans are widely considered to be the best home loans available to buy a home. Mainly due to the benefits these loans bring to their users, including:

  • $ 0 down payment required.
  • Reduce monthly payments.
  • No penalty prior to payment.
  • Low interest rates.

Active Obligation Services Members currently receiving Basic Housing Benefit (BAH) can use their monthly grant to qualify for a VA loan. So, instead of using that monthly subsidy to rent an apartment, the applicant can start investing in a home.

Borrowers with more than one current VA home loan are still subject to county loan limits. Currently, most of the country’s lending limits are at $ 548,250, up from $ 484,350 in 2019 and $ 510,400 in 2020.

Conclusion

The benefits these loans offer make them the perfect choice for borrowers worried about meeting eligibility and affordability requirements. high.

Phil Georgiades is the CLS of the FedHome Loan Center, a brokerage firm that specializes in first time home loans. He has over 22 years of experience working in the real estate industry. To learn more about the programs available to you either Sign up for a mortgage loanCall us at (877) 432-5626.

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