Think you’re not able to buy your own home? Think again – these government-backed loans are ready to help you even if you are struggling to save for a down payment or have less than perfect credit.
FHA loans typically come with competitive interest rates, and smaller down than conventional loans. An FHA loan is insured by the Federal Housing Administration, an agency within the U.S. Department of Housing and Urban Development (HUD).
If you have a credit score of 580 or higher, you could be eligible for a mortgage with a down payment as low as 3.5 percent of the purchase price. You still might qualify for an FHA mortgage if your credit score is lower than 580, but the down payment would be at least 10 percent of the purchase amount.
If you are interested in living in a suburban or rural area, a good choice might be a USDA home loan. The U.S. Department of Agriculture (USDA) guarantees the home loan. There may be no down payment required, and the loan payments are fixed.
There are income limitations and properties must be in designated areas. Applicants with a credit score of 640 or higher typically get streamlined processing. With a credit score below 640, you still can qualify for a USDA loan, but you may need to provide extra documentation about your payment history.
For active-duty military members, veterans and surviving spouses buying homes, The U.S. Department of Veterans Affairs (VA) guarantees part of the loan. This makes it possible for lenders to offer some special features. VA loans come with competitive interest rates and require no down payment or private mortgage insurance (PMI). In addition, VA allows for lower credit scores.
Good Neighbor Next Door
The Good Neighbor Next Door program, sponsored by HUD, provides housing aid for law enforcement officers, firefighters, emergency medical technicians and pre-kindergarten through 12th-grade teachers.
Through this program, you can receive a discount of 50 percent on a home’s listed price in regions known as “revitalization areas.” Eligible homes are published on the HUD website every 7 days. You are required to live in the home for at least 36 months.
The best way to get started is to talk with a Mortgage Consultant at CLG. He or she will help you determine which programs you may qualify for and which gives you the greatest advantages.