| The purchasing of your own home has always been | | | | to for more specific information. |
| part of the American dream but home ownership is | | | | FHA Loans |
| more difficult for some then it is for others. Fortunately | | | | The Federal Housing Association also known as the |
| there are loan programs which help those who might | | | | FHA provides both mortgage insurance and training for |
| otherwise not be able to purchase their own homes. | | | | prospective homeowners. Their programs are geared |
| Many challenges can stand in the way of those | | | | to address the needs of low income individuals, |
| families or couples desiring to purchase a home which | | | | couples or families. FHA doesn't directly loan the |
| will service as their primary residence. This article will | | | | money to prospective homeowners but guarantees |
| look at the role of the FHA, VA State funded | | | | loans made by banks and other financial institutions. If a |
| guarantee loan programs which bridge the gap for | | | | borrower cannot meet the lending institutions standards |
| those who might otherwise be unable to purchase a | | | | for large mortgage loans FHA guarantees the |
| home. | | | | payment with insurance which will payoff the loan to |
| VA Loans | | | | the bank and the FHA will take possession of the |
| Those who have served in the military or armed | | | | property. This greatly reduces the risk to the lender. |
| forces and some qualifying surviving dependents can | | | | The institution that grants the loan services the loan |
| obtain low interest loans from the Veterans | | | | during its term and reports statistical information back |
| Administration. These loans are guaranteed by the US | | | | to the FHA. |
| Department of Government Affairs and can be used | | | | Traditional mortgage loans used for the purchase of |
| for the purchasing of homes to be occupied as | | | | homes require borrowers to deposit up to 10% of the |
| primary residences by individuals and families. Due to | | | | purchase price as a down payment. When borrowers |
| the fact that the income requirements and large down | | | | are unable to do so FHA underwrites the loans for |
| payments required to purchase a home were | | | | buyers who are able to afford the large down |
| preventing veterans from purchasing homes the VA | | | | payment required by mortgage lenders as part of the |
| loan was established to help military personnel to | | | | purchase package. Until the FHA programs came |
| access mortgage loans with better terms and | | | | about many couples and families desiring to purchase |
| conditions when purchasing a new home. A qualified | | | | a home of their own were unable to do so because |
| VA lender can help military veterans and their families | | | | of the prohibitiveness of the large necessary down |
| purchase their home without the need to come up with | | | | payment. |
| a large down payment. | | | | Another risk group for lenders are those whose |
| State Funded Loans | | | | credit-worthiness doesn't meet the mortgage lenders |
| Many states have programs which allow their | | | | standards. In this case FHA loans are used for these |
| residents to purchase homes at reduced interest rates | | | | borrowers who do not meet standard credit approval. |
| and with a small or no down payment requirements. | | | | Credit for some can be a hard thing to establish |
| These programs which are often used in conjunction | | | | thankfully today establishing credit has become much |
| with federal loan programs make purchasing a home | | | | easier then in years past. If an individual has no credit |
| possible for those that would otherwise be unable to | | | | or less then perfect credit programs such as the FHA |
| purchase a home for their family. Those wishing to | | | | program allow the banks to reduce the risk by |
| participate in these loan programs must qualify based | | | | underwriting the loans. Of course the amount of the |
| on income level and purchase a home within the price | | | | loan that FHA is willing to underwrite is set down by |
| limits set down by the individual states. Some states | | | | guidelines and must be adhered to by lenders. Loan |
| only allow first time home buyers to participate in their | | | | amounts that FHA is willing to underwrite can vary |
| programs, but as these programs vary from state to | | | | depending on the income level and purchase price of |
| state it is best to check the state you will be applying | | | | the property. |