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FHA | VA | USDA Loans
These are government insured non-conventional loans.
These are government insured non-conventional loans.
FHA Loans
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FHA loans make it easier for aspiring homeowners to achieve homeownership without the need for a large down payment. This flexible and more attainable loan program is a popular choice for first-time homebuyers, by enabling borrowers to make down payments of as little as 3.5 percent.
This type of loan not only allows for a smaller down payment but less stringent credit score requirements, thus making it ideal for borrowers with little cash saved up and those who have less-than-ideal credit and cannot qualify for a conventional loan.
VA Loans
VA loans, which the U.S. Department of Veterans Affairs (VA) guarantees, are available only to U.S. military service people, veterans, some surviving military spouses and others who have served their country in specific ways. The Department of Veterans Affairs (VA) does not lend money for VA loans, but does guarantee a portion of the loan made by private lenders such as banks and mortgage companies in case the borrower defaults on the mortgage. The VA essentially agrees to repay a portion of the loan to the bank if the borrower defaults or forecloses.
VA loans offer many benefits, including no down payment loan options, favorable interest rates, and more lenient credit and income requirements than conventional mortgages. Note that VA loans are for primary residences only.
Who is eligible for a VA loan?
The great news is that most members of the regular military, veterans, reservists and National Guard may be eligible to apply for a VA loan. Additionally, spouses of military members who died while on active duty or as the result of a service-connected disability may also apply. There are time constraints for application:
- Active-duty military personnel qualify after approximately six months of service.
- Reservists and members of the National Guard must wait six years to apply, but if you are called into active duty before that, you gain eligibility after 181 days of service.
You may also qualify if you:
- Served 90 consecutive days of active service during wartime.
- Served 181 days of active service during peacetime.
- Have been an active member of the National Guard or Reserves for six years or more.
- Are married to a service member who died in the line of duty or as the result of a service-related disability.
USDA Loans
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USDA loans are mortgage loans that help make purchasing a home more affordable for those living in rural areas. The U.S. Department of Agriculture backs USDA loans in the same way the Department of Veterans Affairs backs VA loans for veterans and their families.
This government backing means compared to conventional loans, mortgage lenders can offer lower interest rates. USDA loans are for families who demonstrate economic need, so your adjusted gross income can’t be more than 115% of the median income in the area. You can find out if your income is eligible in the same place you check property eligibility.If you qualify, you can buy a home with no down payment, although you’ll still need to pay closing costs.