U.S. Government Mortgage Loan Programs

Government loan programs can be a very attractive option for prospective homeowners who may not qualify for the most competitive conventional mortgages. Conventional mortgages usually require a larger down payment. If you have less than perfect credit you may not qualify for many conventional loans and find yourself being offered loans with higher interest rates and/or fees than you expected.

Federal Housing Administration (HUD/FHA)
The Federal Housing Administration (FHA) provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring nearly 33 million properties since its inception in 1934. FHA claims to operate entirely from its self-generated income and to cost the taxpayers nothing. It is part of the U.S. Department of Housing and Urban Development's (HUD) Office of Housing.

The FHA does not give money to people for a home and it does not set the interest rates on mortgages it insures. FHA insures loans for lenders against defaults. For the best interest rate and terms on a mortgage, you should compare mortgages from several different lenders. An FHA-approved lender can help you start the loan application process. FHA loans have a low 3% down payment and the money can come from a family member, employer or charitable organization as a gift.

U.S. Department of Veterans Affairs (VA)
The mission of the VA Home Loan Guaranty Program is to help veterans and active duty personnel purchase and retain homes in recognition of their service to the Nation. Veterans are assisted by making it possible for them to compete in the marketplace for credit with persons who were not obliged to forego the pursuit of gainful occupations by reason of service in the Armed Forces of the nation.

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fail to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.