Many homebuyers don’t realize there are several government home loans designed specifically for first-time buyers until it’s too late! Below we’ve listed a few of the most popular programs and shared some details that will help you land an excellent mortgage package.
An FHA loan is distributed and insured by the Federal Housing Administration. The FHA is an agency within the U.S. Department of Housing and Urban Development. With an FHA loan, the lender won’t experience a loss if you default on the mortgage. These loans come with competitive interest rates, lower down payments and closing cost than conventional loans. If your credit score is 580 or higher, you may be eligible for a down payment as low as 3.5 percent of the purchase price. However, if your credit score is lower than 580 you may still qualify for an FHA mortgage, but the down payment will be at least ten percent of the purchase price.
The United States Department of Agriculture has a homebuyer assistance program focusing on homes in selected rural areas (no farm required). The USDA guarantees the loan, and in some cases, no down payment is required, and the payments are fixed. Applicants with a credit score of 640 above undergo a simple process. With a score below 640 you can still qualify for a USDA loan. However, the lender will ask for extra documentation about your payment history. The loan program includes some income limitations, which varies by region.
We’ve created these guides to be a valuable resource to walk you step-by-step through your next adventure.
First-Time Homebuyer Guide
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Active-duty military members, veterans, and surviving spouses are eligible to receive a loan backed by the United States Department of Veterans Affairs. The VA guarantees a portion of the loan, leaving room for lenders to offer some special features. VA loans come along with competitive interest rates and don’t require a down payment. Loan recipients aren’t required to pay for private mortgage insurance (PMI), and there’s no minimum credit score needed for eligibility. If meeting payments on the mortgage become difficult, the VA will help negotiate a deal with the lender on your behalf.
Good Neighbor Next Door
The Good Neighbor Next Door Program is sponsored by HUD and assists law enforcement, firefighters, teachers, and emergency medical technicians with housing. The program offers a 50 percent discount on a home’s listed price in locations deemed “revitalization areas”. To be eligible, you must commit to living in the home for at least 36 months.
Fannie Mae or Freddie Mac
Fannie Mae and Freddie Mac collaborate with local lenders to offer mortgage options benefitting low to moderate-income families. Lenders supported by Fannie Mae and Freddie Mac can offer competitive interest rates and accept down payments as low as three percent of the purchase price.
Ready for the Next Step?
Want more information about government home loans? A home loan expert at Assurance Financial is ready to help you choose the right loan for you today. Our team of loan officers is qualified to help you find a program that fits your needs. Click here for more details and to get started today.