Understanding Loan Options
To ease some of that anxiety, we're explaining three of the major loan programs, FHA, VA and USDA.
FHA loans are mortgages that are backed by the Federal Housing Administration. These loans are especially attractive for buyers who don't have a large down payment, could use some credit help, want to keep their monthly payments as low as possible or have any concerns about increasing monthly payments. FHA loans offer competitive interest rates and typically require less money down.
A VA loan is guaranteed by the U.S. Department of Veterans Affairs and is available for eligible Veterans, Active-Duty Personnel, Reservist or National Guard members and some surviving spouses. In most cases no down payment is required with a VA loan, the interest rates are competitive and closing costs are comparable to other loan options. VA loans also do not require private mortgage insurance.
USDA loans are also known as Rural Development Loans and are backed by the United States Department of Agriculture. Eligibility is limited to rural areas as designated by the USDA. Loans do not require a down payment. Lenders will evaluate your debt to income ratio and credit score to ensure that you qualify.
These are only three of the financing options available. Talk with a lender to find out which program is right for you.