Government Backed Loans – Government loans refer to those loans that are guaranteed by one of two federal agencies. The two types of government loans are: Federal Housing Administration (FHA) loans and Veterans Affairs (VA) loans. The advantage of financing with FHA loans is that they are easier to qualify for and allow the borrower to finance a larger portion of the loan than non-government loans.

While with a conforming loan, the borrower may only be able to finance 80% of the loan amount, an FHA loan allows the borrower to finance 97% of the loan amount. FHA loans are recommended for those borrowers who are first-time buyers, have little money to put aside, have a short credit history, or have difficulty qualifying for a suitable loan. The two main advantages of financing with VA loans are that the VA allows borrowers to finance 100% of the loan amount and that the VA only requires proof of veteran status to qualify for the loan. housing finance company The only downside to government loans is that mortgage insurance is required on all LTVs, unlike conventional and jumbo loans where the mortgage insurance payment is determined by the amount of equity the borrower has in their home.

VA Loan Information

VA loans are designed to provide home buying assistance to United States veterans. The advantage of a VA loan is that you can buy a home with no down payment. In addition, it is slightly easier to qualify for a Veterans Affair loan compared to a regular loan.

Many people who actually qualify for a VA loan are not aware of this.

Who is eligible for a VA loan?

The following table shows what type of service (and for what duration) is required to qualify for a VA loan:

Wartime

Service During: WWII-09/09/40 to 07/25/47 Korean-06/27/50 to 01/31/55 Vietnam-08/05/64 to 07/05/75 Persian Gulf-8/2/90 to the unspecified. You must have at least 90 days of active duty. In addition, you must have been dismissed on other than dishonorable terms. If you served less than the standard 90 days, you may be eligible if you are discharged for a service-connected disability.