Federal Government Programs for Financing a Home

For those looking to purchase a new home, they have a slue of financing options available to them, from the standard mortgage to other avenues that they seldom think of. One of those financing options that people rarely think about is Federal Government Programs. These are sponsored through three main programs and can assist homeowners in purchasing a home. This article will explain these three programs as well as how to qualify for these programs.

The first program that the federal government offers is the Federal Housing Administration home loan. These are offered on new or existing single family homes. The great benefit of these types of loans is that they usually only require a down payment of 3%. Which is much lower than the 40% that is sometimes required by banks and other lenders. In addition, these loans are assumable. However, if the mortgage is assumed, there may be a premium that must be paid in whole or on a monthly basis. But, this premium is usually returned to the person once the loan has been paid off.

Veterans Administration guaranteed loans is also an option for those veterans looking to purchase a home. However, note that it is only available to veterans, and many people have found that these are one time loans. This means that if you were to move, then you cannot utilize the Veterans Administration guaranteed loan again. These loans can be used to buy, refinance or even to make major home improvements to the home that you currently reside in. For those interested, the VA will decide on a fair asking price for the house, and if this price is lower than what is being asked, the down payment will be the difference in price. Therefore, if the asking price and the price that the VA finds are the same, you may have no down payment, which is a huge plus for those that are eligible.

The final program offered by the federal government is the Farmers Home Administration loans. These loans are available to farming families that have very low incomes and in areas that are considered rural or non-metropolitan areas.

These programs are not concrete, they can be affected by local or state governments. In addition, not everyone who qualifies for these programs will become approved. There are numerous people trying to get part of these programs, thus the competition is stiff and most of these programs have a set amount that they pay out every year. Once the money is gone the program is closed.