Government loan programs

Making Home Affordable & Home Affordable Refinance - Recently enacted legislation authorizes Fannie Mae and Freddie Mac lenders to refinance homeowners that have lost equity that disqualified them from refinance. There are an estimated 4 to 6 million homeonwers that may benefit. Do not disqualify your self by not acting. Even if you owe more than the value of your home this program may be the right answer. The window of opportunity is open!

FHA loans

An FHA loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). FHA loans are the the strongest financing tool in the market today. 

In fact, with upward  loan limits of $419000,virtually every home can be financed. See our seperate page for the most powerful tool for buying in this time of foreclosure sales an pre-foreclosure short sales.

FHA loan programs are particularly beneficial to those buyers with less available cash. The rates on FHA loans are generally market rates, while down payment requirements are lower than for conventional loans.

Some of the other benefits of FHA financing:

• Only a 3.5% down payment required.
• Closing costs can be financed.
• Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
• More flexible underwriting criteria than conventional loans.
• FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
• Loans are assumable to qualified buyers.

VA Loans

VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.

Other benefits of a VA loan include:

• Negotiable interest rates.
• Closing costs are comparable and sometimes lower - than other financing types.
• No private mortgage insurance requirement.
• The Mortgage can be taken over (or assumed) by the buyer when a home is sold.
• Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their loan.

 Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.

USDA Rural Development

Rural development does not mean farm land. It generally only means outside the of the metropolitan areas. In the suburbs would be a better description for most homes that qualify. This is the only 0% down program available other than VA. The credit requirements are flexible. Once a property is deemed in an eligible area there are family income limits. These limitations can halt someone from buying upper end priced homes. It is designed to assist people buy typical family housing.

• This can be the most affordable mortgage product available, when eligible.
• True zero down and all closing costs can be financed or seller concessions.   
• Income limits are determined by median incomes for the state and county of the property. In addition, limits are adjusted by the number of people in the household and child care and elderly care expenses. A family of 5 has a higher limit that one of 2.

These three products are hands-down the bread and butter of buying a home. A good mortgage planner that knows these products inside and out can be a great asset for you to save you thousands of dollars and secure the best rates. You will find that professional here.