When buying a home regardless of whether it is new construction or an existing home, you need to get a home loan. There are many types of home loans. For the purpose of this article, we will discuss government subsidized home loans.
Government subsidized home loans are easy to qualify for and require little or no money down. The 3 main types of government subsidized home loans are VA Loans, FHA Home Loan, and the USDA Rural Loan Program. Which loan is best for you will be determined by 1) property location and 2) your US citizenship status.
If you or your spouse have served or are serving in the United States military, the best loan program is the VA loan program. The VA loan is a $0 down government loan program that can be used to buy as many VA homes and as many times as you want. The VA loan will require the seller to pay all or part of the buyers closing costs. Closing costs include your first mortgage payment, property taxes and recording fees. VA loans can be used for almost any property (in the USA or US territory) that is in move-in-condition. If you are not a veteran and want to buy a home in a rural community, the USDA may be the right loan for you.
USDA loans, like the VA home loan program do not require a down payment. The seller or buyer can pay closing costs. USDA loans can be used for move-in-ready property or for property rehabilitation. The program offers assistance to low- and moderate-income rural residents whose household income is equal to or less than 115% of the area median income. The restriction for USDA loans is that the property must be in a rural area. A rural community generally has a population of 10,000 or less; however, a community with a population of 20,000 or less can be considered “rural” if it is located outside a metropolitan statistical area (MSA). If you want to purchase a home in the city and have not served in the military, then an FHA loan may be your best choice.
FHA loans can be used by any American citizen (and by some foreign nationals) over the age of 18. FHA loans can be used for rehabilitation, construction or homes in move-in-condition. Unlike VA or USDA loans, FHA loans require a small down-payment. The good news is that with government assistance and when buying a government owned foreclosure, the down-payment can be as low as $100.
Regardless of the loan type, all government home loans must be inspected and independently appraised. The good news is that almost any home in the United States can be financed by some type of government subsidized loan product. However, each loan type has separate standards of property condition.
In order to get loan approval, basically all you need are : 1) The home must meet certain minimum inspection and value standards. 2) The borrower must have satisfactory income and credit. Considering how easy the process is, a government subsidized home loan may be the best option for you.
————————
The United States Government offers special mortgages for all US citizens.
For a loan application, and program details, visit
VA Loan Info https://www.vahomeloancenters.org
Click here for a loan application on all government products (including VA and non-VA loans).
These special programs provide zero down and low down-payment loan programs.
