What Are Government Mortgage Loans?
Mortgages come in all shapes and sizes. However, all mortgage loans come from lenders. The government does not make loans for the purpose of buying a home. However, in certain circumstances, the government will back loans made by lenders in an effort to help more people buy homes. FHA, HUD and VA loans are all government-backed home loans that certain people may qualify for.
Other People Are Reading
-
VA Loans
-
VA loans are loans that are made to veterans of the armed forces. They are backed by U.S. Department of Veterans Affairs. VA loans can be made to purchase a primary residence only. Credit restrictions do exist, though they are much less stringent than other loans. They are generally available with no money down, interest rate restrictions and limits on closing costs.
FHA Loans
-
FHA loans are backed by the Federal Housing Administration. These loans are available to people who are looking to purchase a primary residence. The amount of the loan will be determined by the size of the house (single family or multifamily) and the location. FHA loans enable people with less-than-perfect credit to obtain a loan with a lesser interest rate than they would have been able to obtain through local channels.
-
HUD Houses
-
A house becomes a HUD home when a FHA loan is foreclosed on. A HUD home must be the potential homeowner's primary residence. HUD homes are generally sold at auction.
Primary Government Backed Mortgage Lenders
-
Government-sponsored mortgage programs allow many more people to realize the dream of home ownership, many of whom would not qualify for a mortgage otherwise. These programs, and others, can be discovered by contacting Freddie Mac or Fannie Mae, the two largest FHA lenders in the nation.
Other Lenders
-
Though most FHA and VA loans are processed through Freddie Mac or Fannie Mae, they don't all originate there. Many other lenders are well versed in helping you obtain a government-backed loan or help you purchase a HUD home.
-
