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Special
Loans for Everyone |
Here's one instance where "your
tax dollars at work" really will mean something to you.
Thanks to several programs sponsored by Uncle Sam, it's possible
for almost everyone to own a piece of the American Dream.
The programs are so successful that almost 60% of all families
in America now own their own homes.
FHA Loans
The Federal Housing Administration (FHA) is a federal agency
within the U.S. Department of Housing and Urban Development
(HUD). FHA's primary objective is to assist in providing housing
opportunities for low- to moderate-income families. FHA has
both single family (one to four units) and multifamily (five
or more units) mortgage lending programs. The agency does
not generally provide the funds for the mortgages, but rather
insures home mortgage loans made by private industry lenders
such as mortgage bankers, savings and loans, and banks.
Homeowners with FHA loans usually only have to make a small
down payment equal to about 3% of the value of the home. They
also enjoy a lower interest rate, between 0.5% and 1% below
the interest rates on other mortgages. The down side is that
they do indeed have to purchase private mortgage insurance,
or -- as it's called under these loans -- mortgage insurance
premium (MIP).
VA Loans
The more you know about loan programs, the more you will realize
how little red tape there is in getting a VA (Veterans Administration)
loan. These loans are often made without any down payment
at all, and frequently offer lower interest rates than ordinarily
available. Aside from the veteran's certificate of eligibility
and the VA-assigned appraisal, the application process is
not much different from any other type of mortgage loan. What's
more, if the lender is approved for automatic processing,
as more and more lenders are, a buyer's loan can be processed
and closed by the lender without waiting for the VA's approval
of the credit application.
Rural Home Buyers
Special loans also exist for people choosing to locate in
a rural area. These loans are given to encourage economic
development in depressed regions. The specifics of the program
are similar to the FHA loan program but may not be as stringent
with the income qualifications.
You'd be surprised, though, at what's considered a "depressed
region." You can sometimes find these loans available
in very nice areas that for one reason or another have managed
to qualify. Be sure to ask if such a program exists in your
area.
No matter what kind of loan you end up getting, though, there
will be tax implications -- generally positive ones. |
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