Government Loan Programs are backed by the Federal System. FHA home loans are insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to home owners, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations.
Programs such as FHA home mortgage are designed to help to low-income and moderate-income families. The ones that do not meet requirements for conventional loans.
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.
VA stands for Department of Veteran Affairs . VA loans are guaranteed by the Department of Veteran Affairs and guaranteed by the U.S. government.
Veterans have the right to buy a home and Government Loan Programs protect them against the loss of property if they fail to repay the loan.
In most cases, veterans do not need to pay down payment. The borrower usually receives a lower interest rate than is ordinarily available with other loans.
Based on Government Loan Programs, Mortgage insurance is not required. The VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage.
VA will put the VA fees right onto the loan. Seller or buyer can pay in cash or they can finance the loan amount.
In order to buy a home, build a home and even improve a home you need A VA loan can be used to. With energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors or other energy efficient improvements approved by the lender and VA.
Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program.