The Federal Housing Administration (FHA) and Department of Veterans Affairs (VA) offer mortgage programs that are popular among homebuyers and those looking to refinance. However, these loans must meet specific eligibility requirements.
FHA Loans
Backed by the U.S. Department of Housing and Urban Development (HUD), FHA loans aim to make homeownership more accessible—especially for first-time buyers. These loans often allow borrowers to purchase a home with a lower down payment than conventional loans or refinance with minimal home equity. The maximum loan amount varies depending on the property type and location.
Key Features:
- Available as both fixed-rate and adjustable-rate mortgages.
- Gifted or grant funds may be used to cover some or all closing costs.
- Current FHA borrowers may qualify for an FHA streamline refinance.
Advantages:
- Lower upfront cash requirements for down payments and closing costs.
- Open to borrowers across all income levels.
- Reduced paperwork for those eligible for FHA streamline refinancing.
- A co-applicant can assist in qualifying, even if they don’t live in the home.
Things to Consider:
- Typically, borrowers can only have one FHA loan at a time.
- In certain cases, FHA loans may be more costly than other mortgage options.
VA Loans
Guaranteed by the U.S. Department of Veterans Affairs, VA loans were established to make homeownership more affordable for eligible military service members and veterans. These loans are available to veterans, active-duty personnel, reservists, and surviving spouses of veterans with full entitlement. Qualified applicants can buy a home with no down payment, refinance up to 100% of the home’s value, and avoid private mortgage insurance (PMI).
Advantages:
- Offers various rate, term, and cost options.
- No monthly mortgage insurance required.
- No down payment necessary.
Things to Consider:
- Requires a one-time VA funding fee, which can be rolled into the loan.
- Only applicable for primary residences.
These mortgage programs have specific eligibility criteria. Consult a local mortgage specialist to determine if you qualify.
Note: Prosperity Home Mortgage, LLC is not affiliated with or endorsed by any government agency.
