Government home loans are not only some of the most lenient eligibility requirements, but they can also save you money through the many benefits they offer. Government guaranteed home loans are administered by the Federal Housing Administration (FHA), the Department of Veteran Affairs (VA), and the U.S. Department of Agriculture (USDA).
Each one of these Government loans has its eligibility requirements as well as its benefits. Also, these loans have a specific type of applicant in mind. FHA loans are perfect for first-time borrowers, while VA is for former and current military members, and USDA loans are for lower-income applicants.
FHA Home Loans
These loans are perfect for first-time borrowers because they have the most lenient eligibility requirements out of any home loan available. They also offer some great incentives for applicants who are eligible for this home loan. These benefits include:
– A low down payment of 3.5% is lower than the 20% required by most conventional loans.
– FHA down payment assistance grants are available.
– Lower closing costs.
– Lower monthly mortgage payments.
FHA loans also allow lenders to let the applicant borrow more than the property is worth to finance renovations and repairs needed by the property. However, one limitation in FHA loans is that applicants can only borrow up to the loan limit, by a specific county.
To be eligible for these loans, the applicant must have a credit score of at least 580, although individual lenders will accept applicants with lower credit scores to apply for one as long as they pay a higher down payment.
VA Home Loans
These loans are exclusive to Veterans, Active Duty Service Members, and eligible spouses. Most real estate experts consider these the best home loans available due to their lenient eligibility requirements and excellent benefits. Which include:
– $0 down payment requirement.
– Lower interest rates.
– Lower monthly mortgage payments.
– No mortgage insurance premiums.
– No prepayment penalties.
In addition to these benefits, as of January 1st, 2020, VA home loans no longer have loan limits for first-time borrowers. As a result, VA home loans are even better as borrowers can now take out loans up to $5 million through VA Home Loan Centers, as long as they can afford it. However, loan limits still apply for borrowers with more than one active VA loan.
USDA Home Loans
Home loans guaranteed by the USDA are outstanding for lower-income borrowers that want to purchase a home in a rural community. These loans have some lenient eligibility standards and can only finance modest single-family homes, and eligible houses cannot be for any business purposes whatsoever. Some of the benefits that USDA loans offer are:
– $0 down payment requirement.
– Lower monthly mortgage payments.
– Competitive interest rates.
When it comes to eligibility, USDA loans require that the applicant has a history of at least 12 months of making payments on time, an income at or below the county’s low-income limit. Also, the applicant must be a U.S. citizen, have a credit score of at least 640, have a stable and dependable income, and the property must be his or her primary residence.
In addition to the eligibility requirements mentioned, the applicant must adhere to the loan limit based on the property.
Conclusion
Owning a home and paying little to nothing is possible in Hamilton County through the usage of Government guaranteed home loans. The only requirement is that you meet their eligibility requirements.
Phil Georgiades is the CLS for FedHome Loan Centers, a brokerage specializing in first-time buyer home loans. He has more than 22 years of working in real estate. To learn more about programs available to you or apply for a home loan, call us at (877) 432-5626.
