A government loan is one that is guaranteed or insured by the federal government under the Veterans Administration (VA), the Federal Housing Administration (FHA) or the Rural Housing Service (RHS) of the U.S. Department of Agriculture.
FHA mortgage loans are issued by federally qualified lenders certified by the U.S. Federal Housing Authority, a division of the U.S. Department of Housing and Urban Development.
These loans are popular, especially for first-time homeowners, because they are:
- Generally easier to qualify for than conventional loans
- Have lower down payment requirements
- Cannot exceed statutory loan limits
FHA loan limits define how much you can borrow for a HUD-backed mortgage (U.S. Dept. of Housing and Urban Development). Each state has different limits. Your mortgage loan advisor can tell you what is available for your FHA home loan, or you can check for yourself here.
VA loans – Offers Up to 100% Down Payment Assistance!
Designed to offer long-term financing to American veterans, VA mortgage loans are issued by federally qualified lenders and are guaranteed by the U.S. Veterans Administration. The VA determines eligibility and issues a certificate to qualifying applicants to submit to their mortgage lender of choice. It is generally easier to qualify for a VA loan than conventional loans.
Here’s how it works:
- 100% financing without private mortgage insurance or 20% second mortgage.
- A VA funding fee of zero to 3.3% (this fee may be financed) of the loan amount is paid to the VA.
When purchasing a home, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less. When refinancing a home, veterans may borrow up to 90% of reasonable value in order to refinance where state law allows.
USDA Loans – Offers Up to 100% Down Payment Assistance!
The U.S. Department of Agriculture offers a variety of programs to help low- to moderate-income individuals living in small towns or rural areas to buy a home. The Rural Housing Service (RHS) helps qualifying applicants, who cannot receive credit from other sources, purchase modestly priced homes as their primary residence. Funds can be used to build, repair, renovate or relocate a home, or to purchase and prepare sites, including providing water and sewage facilities.
USDA Loans are a great option for those who don’t want to live in the city because they offer:
- Minimal closing costs
- Low or no down payment requirements
Accurate Mortgage Group’s USDA loans terms are available for up to 30 years.
USDA loans can be used toward the purchase and renovation of a previously owned home or a new construction.
THDA Programs – Offers Up to 100% Down Payment Assistance!
THDA (Tennessee Housing Development Agency) offers 30-year, fixed-rate mortgage loans and down-payment-assistance loans to first-time homebuyers. Not every borrower is eligible for a THDA mortgage. Borrowers must meet certain requirements and conditions associated with their credit history, income limits and the cost of the home they’re interested in purchasing.