Government subsidized home loans are loans insured or guaranteed by the government. These loans include Veterans Administration home loans (VA Loans), United States Department of Agriculture home loans (USDA Loans), Federal Housing Administration Home Loans (FHA Loans), and United States Department of Housing and Urban Development home loans (HUD Loans). The United States government does not loan the money directly. The various agencies listed above will underwrite and review the file while the money is lent from investors and backed by the government.
Some of the advantages of government subsidized home loans include:
- easy loan approval
- low fixed rate monthly payments
- low down-payments (some GS loans are even $0 money down)
- Almost any property can be purchased using these loans
Employment and income will be verified prior to loan approval. Recent pay stubs, monthly bills, bank statements, no recent history of late payments and W2’s will be requested. A steady income and a good credit rating are mandatory. Additionally, borrowers are required to agree to live in the home they’re purchasing.
Financing a $0 down home loan through the Veterans Administration (VA Loans program) is an attractive financing option for those who have served in the military (and their surviving spouses). VA home loan info can be obtained from any regional VA HLC office.
Each VA loan is underwritten and monitored by VA regional loan centers located in Atlanta, Cleveland, Denver, Honolulu, Houston, Manchester, Phoenix, Roanoke, St. Paul, St. Petersburg and Winston/Salem. Applicants will be required to prove their eligibility before completing a VA home loan application. Applicants must have an honorable discharge and must have served at least 90 days during wartime or 181 days during peacetime. Applicants can become eligible after six years of service in the National Guard or Reserves. A certificate of eligibility will be issued for a VA loan when all requirements have been met.
Applicants who have not served in the military may also qualify for other $0 Down Government Home Loans. The USDA is a $0 down home loan like the VA Loan but open to all US citizens. The USDA loan restricted to rural areas and low income borrowers.
Federal Housing Administration (FHA) home loan programs offer the best opportunities for future home owners to get home mortgages with as little as $100. The standard FHA requires 3.5% down on home purchases however; there are government grants, borrower incentive programs, and special government purchase options. A new one percent down gift program is available in eligible states. This program allows qualified borrowers to receive 2.5% of the home price to be used for down payments and closing costs. This money doesn’t have to be paid back. The remaining 1% can be acquired from a family member or any other FHA approved source. Grant money, available in many states, can be another good source of free money to consider when financing a home. If you’re interested in pursuing a USDA, FHA or VA loan, visit your regional VA HLC for your government subsidized home loan application.
For a very limited time, VA Home Loan Centers will originate every type of government subsidized mortgage for any American over the age of 18 (no prior military service required). See Get Connected for details.
