Government loans are insured or backed by the U.S. federal government. There are many types of government loans, including loans for college education, mortgages, disaster relief, opening a business and loans to support veterans. There are also government home loans to help all types of home buyers purchase their dream homes. There are three types of Government Loans:
There are three types of Government Loans:
FHA Loans:An FHA Mortgage Loan Is one which is backed/secured by the Federal Housing Administration. The minimum down payment for this loan is 3.5% including an upfront Mortgage Insurance Premium that can be financed into the loan. These loans are best fit for consumers who have lower credit scores & income. This offers with lower credit/ or income consumers to qualify for a Mortgage whereas in other instances they wouldn’t be able to because of their credit &/or income.
VA Loans:A VA Mortgage Loan is secured by the U.S Department of Veteran Affairs. Only qualifies for individuals who are U.S Veterans, Active-Duty Members, & in some instances surviving spouses of a deceased veteran (this is on a case-by-case basis). Normally does not require a down payment, this loan comes with a guarantee which is the Government basically saying if this loan is not paid or does not continue to get paid, they will pay a portion (not all) but a portion of the loan, along with a Certificate of Eligibility (COE) which essentially shows the lender you meet the requirements for this Loan Program. These loans do not have a credit score, or Mortgage Insurance requirement & typically have very minimal closing costs.
USDA Loans:A USDA Mortgage Loan Is a guaranteed Loan Program backed by the United States Department of Agriculture. These loans are only eligible in Rural areas & eligibility can be found by looking up Zip Code & property address, also like VA Mortgage Loans these allow for 100% financing (no down payment).