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Government Loans - VA and FHA Loans

Government loans are loans backed or insured by the federal government. If a mortgage lender or bank forecloses on a government loan, they can recover any losses from the sale of the property from the applicable government agencies. FHA loans are backed by the US Department of Housing and Urban Development (HUD). VA loans are insured by the Dept of Veteran Affairs. Both of these Agencies require a borrower to meet a list of requirements in order to be eligible for this type of financing.

FHA Eligibility:

  • Must be owner occupied primary residence
  • Borrower cannot have another FHA mortgage unless they are purchasing new home due to relocation
  • Minimum Down pmt is 3.5% - 96.5% financing on purchase loan
  • FHA funding fee is 1.75% of the loan amount
  • Monthly Insurance payments will apply, and in some cases, for the life of the loan

VA Eligibility:

  • Must be owner occupied primary residence (except on streamlined refinance)
  • Borrower must be active military service member, veteran, national guard or reserves, or spouse of deceased veteran
  • Minimum Down pmt is 0% - 100% financing on purchase loan
  • VA funding fee varies depending on down pmt (from 1.25% - 3.3% on purchase, from .5 % -3.3% on refinances)
  • No Mortgage Insurance