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Government Mortgage Loans

Federal Housing Administration (FHA) Loans:

FHA mortgage programs are available to all buyers. These programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans. FHA loan programs are particularly beneficial to those buyers who don't have much cash available.

FHA loan benefits:

  • Only requires a 3% down payment
  • Ability to finance closing costs
  • FHA has set limits on the amount lenders can charge for some closing cost fees (e.g. origination no more than 1% of mortgage)
  • Maximum mortgage amount can vary significantly by area. FHA adjusts this amount periodically based on certain economic variables. You should check with your local FHA office or approved lender to determine your maximum mortgage amount.
  • Under certain conditions, automatic cancellation of the FHA mortgage insurance premium

Department of Veteran Affairs (VA) Loans :

VA loan programs are available to eligible veterans for the purchase of a home. The VA guaranty loans encourage lenders to offer loans to veterans by protecting lenders against loss if the borrower cannot make the payments. VA loans are particularly beneficial to those veterans that do not have much cash available. VA guidelines allow higher front-end and debt ratios compared to other loan programs.

VA loan benefits:

  • No down payment requirement
  • More favorable interest rates are frequently offered by lenders because of the VA's guarantee backing
  • Ability to finance funding fee
  • No mortgage insurance premiums
  • Maximum loan amount may be 100% of appraised value of home, determined by a VA-approved appraiser or up to four times the VA eligibility entitlement (currently $50,750 with a maximum loan amount of $200,300).
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