Here are some of the different types of other mortgage and loan programs that might be available to you:
The United States Department of Veterans Affairs (VA) offers home mortgages to eligible Veterans.
A VA Housing Specialist can advise a buyer about the different types of VA mortgages available.
For additional information, call the VA loan center at (877) 827-3702.
VA Home Loan
VA home loans can be used to purchase a home, purchase a manufactured home, build a new home or buy and renovate an existing home.
To be eligible, you must:
VA Native American Direct Loan (NADL)
The Native American Direct Loan is also a direct loan from the VA and frequently has better rates and lower costs than home loans from banks or mortgage lenders because the VA is the lender.
To be eligible:
VA Owned Homes
The VA acquires some properties as a result of foreclosures on VA-guaranteed or VA-financed loans. These homes usually are in need of repairs and many are older homes. The prices of VA foreclosed properties tend to be lower.
VA properties for sale are listed through a contracted vendor. There are not many VA owned homes, but if interested, a buyer may view the listings at VA properties list. The VA advises a buyer to contact a local real estate broker of the buyer’s choice, for more information about a specific home.
USDA Section 502 Guaranteed Loan Program
Much like FHA-Insured mortgages, the U.S. Department of Agriculture (USDA) Rural Development agency insures mortgages made with USDA approved banks and lenders. This type of insured loan does not require the buyer to provide a down payment, allowing for 100% financing of the home.
The Section 502 Guaranteed Loan Program can be used to purchase, build, repair, or even relocate a home in eligible rural areas.
The program covers homes located or built in 97% of the United States. Homes in urban areas are not eligible. Areas covered by this program can be found here.
Buyers must meet specific requirements including:
USDA Direct Loan
The Section 502 Direct Loan Program helps families who have low-to-moderate income and want to purchase, build, renovate or relocate a home, or purchase and prepare sites, including providing water and sewage facilities, in a rural area. A USDA Direct Loan means the USDA is the direct lender and no other bank or mortgage lender is involved.
The USDA Direct Loan program will have a fixed interest rate based on current market rates at loan approval or loan closing, whichever is lower. However, with payment assistance, the interest rate can be as low as 1%. The loans have up to a 33-to-38 year payback period (depending on the buyer’s circumstances) and usually no down payment is required.
Payment assistance is a part of the USDA Direct Loan which helps cover the monthly mortgage payments, but only for a short period of time. The buyer is obligated to pay all or a portion of the payment assistance received during the life of the loan when the buyer moves out or sells the home.
To obtain a USDA Direct Loan, the buyer must meet the following eligibility requirements:
Properties financed with direct loan funds must:
For the USDA, a Homebuyer Education Course certificate is required for first time homebuyers.
The Federal National Mortgage Association (FNMA) known as Fannie Mae, is privately owned but government-sponsored and is under the conservatorship of the Federal Housing Finance Agency (FHFA). Fannie Mae purchases secondary mortgages (mortgages already completed with a bank) from commercial bank lenders.
Although Fannie Mae does not offer mortgages directly, it does set the guidelines for mortgages programs such as HomeReady mortgages, 3% down payment mortgages and mortgage programs available through state and local Housing Finance Agencies (HFAs),for low-to-moderate income buyers.
Fannie Mae keeps a list of their preferred lenders here.
The Federal Home Loan Mortgage Corporation (FHLMC) known as Freddie Mac is very similar to Fannie Mae, except it usually purchases secondary mortgages from smaller banks. Freddie Mac does not make direct mortgages either but does set the guidelines for the mortgage program called Home Possible 3% down payment.
After a buyer gets a mortgage from a bank, Fannie Mae or Freddie Mac may purchase the buyer’s mortgage from the bank.
Freddie Mac or Fannie Mae will keep the mortgage or combine that mortgage with other mortgages in a bundle and offer the bundle as mortgage-backed securities for investors to purchase.
If a buyer cannot continue to pay a mortgage and that mortgage was part of a bundle purchased by an investor, Fannie Mae or Freddie Mac will pay out the price of the mortgage to the investor.
Habitat for Humanity builds or renovates homes for qualified families. If you are living in damaged, unhealthy or poorly built housing or the rent for the home is too expensive, or if you are disabled and living in inaccessible housing, you probably will qualify for the Habitat for Humanity program. According to the Habitat for Humanity website, the basic qualifications for the program include:
As with many housing programs, funding is limited. To apply, check with your local Habitat for Humanity office here, or call Habitat for Humanity at 800-422-4828 for more information.
If your application is accepted, you will be obligated to put in ‘sweat equity,’ which means you will help build your home or the home of others, or work in the Habitat for Humanity home store called Habitat ReStore.
Also, you will need to take classes in financial management where you will learn about credit repair, budgeting, bank accounts and other financial matters.
States and Housing Agencies may use federal HOME and CDBG funds to build new homes or renovate older homes for low income buyers to purchase. Additional homeownership programs may be offered locally by your state or city. You can access your state list here.
Even if it looks difficult to get housing, apply anyway.
Some factors make it look like a longshot to get housing. Any waiting list opening is a legitimate chance to get housing, no mattter how long it takes.Gordon Gross says:
"The best feature of Affordable Housing Online is being notified by email when a waiting list opens, or is scheduled to do so. I'm very grateful for this website's services."