Government Loans

Government loans are mortgage loans that are insured or guaranteed by the federal government. These loans are designed to aid homebuyers who meet mortgage criterion that allow them to get into a home either with a lower down payment , lower mortgage rates and/or with a lower credit rating.

In many instances consumers seek government loans because they do not qualify for a conventional loan. A conventional loan is simply any loan that is not a VA loan, FHA loan, RHS loan, state or local government loan.

The following three federal agencies provide government loans. Also, the homes purchased must meet certain standards to apply.

U.S. Department of Veterans Affairs (VA) Loans

• Qualified military veterans are able to purchase a home under $203,000 with no down payment.

Federal Housing Administration (FHA) Loans

• FHA does not provide home loans. 

• FHA provides the mortgage lender insurance that will compensate the lender for any losses in case of default on the loan
• Very low down payment on your home. (between 3-5% based on the FHA appraisal value)
• Maximum loan limit depends on the average cost of living in your local area
• Flexibility in calculating household income to payment ratios

Rural Housing Services (RHS)

• RHS does not provide mortgages, it simply guarantees mortgage loans made to rural residents
• Low interest rate loans with no down payment to low to moderate income rural residents
• Loans have lower closing costs than with conventional loans

State and Local Loan Programs

• Special programs available for first-time home buyers.
• Loan offers first-time home buyers with low down payments or lowered interest rates if specific income guidelines are met
• Certain state or local agencies provide assistance with down payments and closing cost

• 100 Percent Financing Loans
• Adjustable Rate Mortgages
• Conforming Loans
• Conventional Loans
• Fixed Rate Mortgages
• Hybrid Loans
• Interest Only Loans
• Jumbo Loans
• Second Mortgages
• Subprime Mortgage