Government loans are mortgage loans that are insured or guaranteed by the federal government. These loans are designed to aid home buyers who meet mortgage criterion that allow them to get into a home either with a lower down payment , a lower interest rate and/or with a lower credit rating.

In many instances consumers seek government loans because they do not qualify for a conventional loan.A conventional loan is simply any loan that is not a VA loan, FHA loan, RHS loan, state or local government loan.

The following three federal agencies provide government loans. Also, the homes purchased must meet certain standards to apply.

Qualified military veterans are able to purchase a home under $203,000 with no down payment.

FHA provides the mortgage lender insurance that will compensate the lender for any losses in case of default on the loan

Very low down payment on your home. (between 3-5% based on the FHA appraisal value)

Maximum loan limit depends on the average cost of living in your local area

Flexibility in calculating household income to payment ratios

RHS does not provide mortgages, it simply guarantees mortgage loans made to rural residents

Low interest rate loans with no down payment to low to moderate income rural residents

Loans have lower closing costs than with conventional loans

Special programs available for first-time home buyers.

Certain state or local agencies provide assistance with down payments and closing cost

Blog: Gimmie The Scoop

Source: www.isnare.com