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Breaking Down the ‘Big 3’ Government-Backed Home Loans

Ask any mortgage professional, and they’ll tell you how popular government home loans are. After all, it makes complete sense. Federally-backed mortgages can open the door to homeownership with less strict eligibility standards and lower down payment requirements, to name a few advantages. These programs have advantages for all home buyers, but they are often a great option for first time home buyers.

So, today we’re running down the “Big Three” government-backed home loans to give you a head start on your journey to homeownership.

  1. Federal Housing Administration (FHA) home loan

An FHA mortgage is by far one of the most popular home loans backed by the government. FHA loans are great if you are a first time home buyers or don’t have a large down payment.

Here are some huge advantages to an FHA home loan:

  • Down payments as low as 3.5 percent
  • Buy a single-family, condo, or property with up to four units
  • Fixed and adjustable rates that can be lower than other home loans
  • Relaxed credit scores and income requirements mean that more people qualify

Applicants may also use gift funds from relatives, wedding gifts, or their employer as part of their down payment. Additionally, sellers can contribute to closing costs, making this an even more attractive option.

Where government-backed home loans are concerned, the FHA loan deserves a serious look, especially for anyone new to homeownership.

  1. The Veterans Administration (VA) home loan

Few government-backed home loans can beat the one offered by the VA. This home loan was established as a way to help our nation’s bravest achieve the dream of homeownership.

A VA home loan offers rare perks not available in other government home loans. Before we explore what those are, here’s how you know if you’re eligible for a VA home loan:

  • Active Duty service members
  • Veterans
  • National Guard
  • Reserves
  • Surviving Spouses

If you meet these qualifications, serious savings are waiting for you. For example, certain fees are “non-allowable,” which makes the road to homeownership more affordable.

Here are some of the ways a VA home loan can help you keep costs down:

  • No down payment
  • No prepayment penalties
  • No private mortgage insurance
  • No escrow fees
  • No attorney fees besides title work
  • No FHA/HUD inspection fees (except for builders)

That’s just the beginning. Even document preparation fees are designated as “non-allowable.” And your VA fees can be rolled into your mortgage, which offers 100% financing. It’s yet another way that a VA home loan helps lower the barriers to homeownership.

In addition to waving certain fees, VA home loans come with other big advantages:

  • Use your VA home loan entitlement more than once. You can even carry multiple VA loans at the same time.
  • Buy a primary residence, even when actively serving. As long as your spouse lives there, you can use your VA home loan benefit while deployed.

MBA Mortgage is veteran-owned and operated, and we employ numerous mortgage professionals with military experience. We know that veterans bring unique needs to the mortgage process, and we’re here to help you succeed.

Discover how a VA home loan can help you begin your next chapter.

  1. The United States Department of Agriculture (USDA) home loan

Looking to say goodbye to the hustle and bustle of the city? A USDA home loan could be your ticket to a new pace of life.

Besides meeting certain income requirements, USDA home loan eligibility is also determined by the property’s location. USDA home loans are given to those who are buying homes in less densely populated areas. You can check whether your desired area is eligible by clicking here.

You’re also required to qualify for your current monthly expenses and liabilities, as well as the annual guarantee fee.

Key benefits of a USDA home loan are:

  • No down payment
  • 100% financing
  • 30-year fixed rates
  • Credit requirements comparable to other agencies

In 2020, the USDA announced updated eligibility guidelines. Now it’s easier than ever to find that perfect parcel in a community you love.

Let’s get you moving

Our talented team of mortgage professionals spans across the Bay State. We know government home loans like no one else, and that’s why we make it easy to get a mortgage that works for you.

Contact us today and discuss your options. We’ll get you home!

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