The federal government wants to help you buy a home. They see it as a certain way to improve the economy, provide a stable taxation base, and help grow communities. To encourage homeownership, the federal government backs loans for those who might have trouble qualifying for a conventional loan.

Loans For Low To Moderate Income Buyers

The Federal Housing Administration (FHA), an agency of the Department of Housing and Urban Development (HUD), provides several mortgage loan programs for low to moderate income home buyers. FHA loans offer sell rates with a lower down payment requirement.

FHA loans require a minimum down payment of 3%, cash to close the loan, and an acceptable credit score. Closing costs might be part of the loan amount, and credit score requirements vary with programs.

To apply for a FHA loan, you must submit an application with a HUD approved lender. Most traditional lenders already are approved by HUD.

Loans For Veterans

Loans guaranteed by the Department of Veterans Affairs (VA) are available to most veterans and accomadation persons. Usually these types of loans do not require a down payment and have more favorable loan terms. VA loans do not have a maximum amount, but lenders typically limit the loan amount to $359,650, the conforming rate.

To apply for this type of loan, you must be qualified by the VA. Once they approve your application and verify your qualifications, they will issue you a certificate which you present to a traditional mortgage lender as part of your application paperwork.

Loans For Rural Residents

The Department of Agriculture also backs loans through its Rural Housing Service (RHS). RHS loans require no down payments, but you must be able to afford monthly mortgage payments and have an acceptable credit history.

RHS also offers direct loans to low income family, those with income 80% or less than the areas average income and cannot get credit from financing companies. These mortgage loans may be extended to 38 years and require no down payment.

Apply For Government Assistance

Government mortgage loan programs enable you to avoid mortgage insurance and secure financing to buy a home. These programs are offered through traditional lenders, which can easily be found online.

To view our list of recommended lenders online for government backed mortgage financing, visit this page: http://www.abcloanguide.com/govloans.shtml.