Mortgage Question #5: What kinds of government loans are available to homebuyers?
Several federal, state and local government financing programs are available to homebuyers. The two main federal programs are: • VA Loans. U.S. Department of Veterans Affairs (VA) loans are available to men and women who are now in the military and to veterans with other than dishonorable discharges who meet specific eligibility rules, most of which relate to length of service. The VA doesn’t make mortgage loans but guarantees part of the house loan you get from a bank, savings and loan or other private lender. If you default, the VA pays the lender the amount guaranteed and you in turn will owe the VA. This guarantee makes it easier for veterans to get favorable loan terms with a low down payment. For more information, check the VA’s Website at www.va.gov or contact a regional VA office for advice. • FHA Loans. The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), insures loans made to all U.S. citizens and permanent residents wh
