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The Federal Government offers a number of programs in place to help people with
lower incomes realize the American dream of home ownership. One of these
programs is administered by the Federal
Housing Administration (FHA). Another is governed by the Veterans
Administration (VA). For first-time homebuyers and active or veteran
military personnel, an FHA or VA loan can be a great mortgage solution.
There are some differences between the two programs, but their main purpose is
very similar: to provide those with lower incomes the opportunity to enjoy home
ownership. Let’s examine each one.
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FHA
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VA
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- Can qualify without high income
- Low down payment (typically 3.5%)
- Interest rates typically below standard market
rates
- Requires payment of upfront Mortgage Insurance
Premium
- MIP can occasionally be financed at close
- Options for seller to pay points or closing
costs
- Cash gift allowed for down payment
- Availablity of 15 or 30 year term
- Fixed or adujustable rates available
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- Can Qualify without high income
- Down payment as low as 0%
- Interest rates typically below standard market
rates
- Requires payment of upfront Mortgage Insurance
Premium
- Options for seller to pay points or closing
costs
- Cash gift allowed for down payment
- Availablity of 15 or 30 year term
- Fixed rate only
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