For many people, federal and state home loan assistance programs provide major benefits. These government loan programs allow first-time home buyers, veterans, military personnel, low-income buyers and people with credit history problems to realize their dream of owning a home faster and easier. Gershman Mortgage offers four types of government loan programs: FHA loans, VA loans, MHDC Mortgage Revenue Bond Program loans, and USDA Rural Housing Development Loans. Each of these programs are unique and cater to a unique type of home buyer, meaning there is a good chance that one of them could help you with your own home purchase.
A Federal Housing Administration (FHA) loan is an excellent choice for those who may have credit history problems or who are first-time home buyers. This loan is offered by private lenders like Gershman Mortgage, but insured by the federal government. You may be able to get an FHA loan even if your credit score is as low as 580, although keep in mind that interest rates are typically higher for those with lower credit. Additionally, FHA loans require fairly small down payments, in some cases as low as 3.5 percent depending on your credit history.
Another federal loan program, VA loans are guaranteed by the Department of Veterans Affairs (VA). Available to veterans, active military personnel, National Guard and Reserve members, and certain military spouses. VA loans have some of the best terms of any home loan assistance program around. A big advantage of a VA loan is the elimination of a down payment, no requirement for private mortgage insurance, and zero prepayment penalties. Eligible applicants will, however, still need to prove sufficient income and credit history in order to qualify for a VA loan.
MHDC Mortgage Revenue Bond Program
Also called the First Place Homebuyer Program, the MHDC Mortgage Revenue Bond Program is run by the Missouri Housing Development Commission (MHDC) and is available only in Missouri. This loan is available to first-time home buyers or veterans whose income meets certain income limits and credit requirements. Eligible applicants can actually apply for one of two types of loans through this MHDC program. The first type offers cash assistance of up to 4.5 percent of the purchase price to be used towards a down payment and/or closing costs, while the other loan type offers non-cash assistance, but an interest rate that is lower than typical market rates.
USDA Rural Housing Development Loans
Run by the United States Department of Agriculture (USDA), and hence a federal program, the USDA Rural Housing Development Loan program has some great benefits for eligible applicants. This loan is available to low- and middle-income home buyers who live in eligible geographic areas. Don’t let the name of this loan fool you, however, as many people who live in suburban areas just outside of major cities also qualify. A few of the benefits of this loan type include 100 percent financing, low interest rates, and competitive private mortgage insurance costs. USDA Rural Housing Development Loans are only available as fixed-rate mortgages.
Government loan programs are an excellent opportunity to get a jump start on a home purchase. Give us a call today, we can discuss what lending program is right for you and explain in further detail how a home loan assistance program may be able to help you get into your new home faster.