Understanding the different type of loans available is critical to your pocket. It could save or cost you thousands of dollars.


Usually the go-to program for many first-time buyers, especially ones that have a credit history that’s… let’s say needs improvement. The Federal Housing Administration guarantees a portion of the mortgage, which frees lenders to expand their acceptance standards. With FHA backing, borrowers can qualify for loans with as little as 3.5% down or 1% of their own funds. FHA loans are different from most other loans in that they do have an up-front and ongoing additional fee built in: mortgage insurance premiums. This protects the lender’s stake in the loan if it goes into default. FHA does not require a credit score but lenders that provide the loan have their own “overlays” that add a particular credit score requirement.


The U.S. Department of Veterans Affairs helps veterans and surviving spouses buy homes. These are especially generous, usually requiring no down payment or mortgage insurance. VA loans has only a few requirements for things like debt and sufficient income but lenders may add their own “overlays,” or additional requirements.

With 0% Down, closing costs still runs approximately 4 to 6% of the purchase price. Calculate Your Closing Costs Here.


Do I need to live on a farm to get one? The answer is no. The U.S. Department of Agriculture does have a homebuyers assistance program. The program is tailored for rural areas and allows 100% financing by offering lenders mortgage guarantees. Like most programs, there are income limitations, these vary state and region.

HUD 203(k)

These loans are designed for buyers who want to purchase a home that needs repairs that normally a lender will not finance because of the repairs. This particular FHA-backed loan considers what the value of the property will be after improvements are made and allows you to borrow the funds to complete the work as part of your main mortgage.

Last time we checked, only a handful of listings appeared on the website. Curiously, one home we checked out in the Dollar Home category seemed to be listed for $17,900. We’re not sure what that’s about, but shop carefully.


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