Financial Programs

There is a lot to consider when buying a home – your Purse Strings Approved Professional loan officer will help you decide which loan program is best for you. Besides traditional loans, there are also some additional options that might be appealing to you and your unique situation. 

• • FHA Loan. In an FHA loan, the Federal Housing Administration insures the mortgage, meaning that your lender won’t experience a loss if you default on the mortgage. FHA loans typically come with smaller down payments more lenient qualification guidelines than conventional loans. If you have a credit score of 580 or higher, you could be eligible for a mortgage with a down payment as low as 3.5 percent of the purchase price. If your credit score is lower than 580, you still might qualify for an FHA mortgage, but the down payment would be at least 10 percent of the purchase amount.
  • VA Loan. The U.S. Department of Veterans Affairs (VA) helps active-duty military members, veterans and surviving spouses buy homes. The VA guarantees part of the loan, making it possible for lenders to offer some special features. VA loans come with competitive interest rates and require no down payment. You aren’t required to pay for private mortgage insurance (PMI), and a minimum credit score isn’t needed for eligibility. If it becomes difficult to make payments on the mortgage, the VA can negotiate with the lender on your behalf.
  • Fannie Mae or Freddie Mac. Fannie Mae and Freddie Mac are typically referred to typical mortgage loans. They work with local lenders to offer mortgage options to all families. 
  • Fannie Mae Home Ready and Freddie Mac Home Possible Loans. These are offered through the community reinvestment act which helps low to moderate income households purchased homes. Through these programs, lenders can offer competitive interest rates and accept down payment as low as 3% of the purchase price. And, both programs provide home ownership education.
  • FHA Section 203(k) Renovation Loan. If you’ve run the numbers to see how much house you can afford and have determined a fixerupper is best for your budget, the Section 203(k) rehabilitation program may be a good fit. This type of loan, backed by the FHA, takes into consideration the value of the residence after improvements have been made. It then lets you borrow the funds you’ll need to carry out the project and includes them in your main mortgage. The down payment for a 203(k) loan can be as low as 3.5 percent.
  • Native American Direct Loan. Since 1992, the Native American Veteran Direct Loan program has helped Native American veterans and their spouses buy homes on federal trust lands. The VA serves as the lender. If you’re eligible, you won’t be required to make a down payment or pay for private mortgage insurance (PMI). This first-time homebuyer loan also offers low closing costs and a 30-year fixed-rate mortgage.
  • Local Grants and Programs. Many states and cities offer help to first-time homebuyers. Before buying a home, check your state’s or community’s website for information on housing grants and programs available in your area. Work with a Purse Strings Approved Professional lender to learn more about these programs. You also might consider contacting your local HUD-approve housing counciling agency to learn more about programs in your area that might apply to your situation.
  • Energy-efficient Mortgage (EEM). An energy-efficient, or “green,” mortgage is designed to help you add improvements to your home to make it more environmentally friendly. The federal government supports EEM loans by insuring them through the FHA or VA programs. The key advantage of this mortgage is that it lets you create an energy-efficient home without having to make a larger down payment. The extra cost is rolled into your primary loan. Some improvements you can make include installing double-paned windows, new insulation or a modern heating-and-cooling system. This is an add on feature, not a loan in and of itself. 
  • USDA Loan. While not well known, the U.S. Department of Agriculture (USDA) has a homebuyer assistance program. While the program focuses on homes in certain rural areas, you don’t need to buy or run a farm to be eligible. The USDA guarantees the home loan. There may be no down payment required, and the loan payments are fixed. Applicants with a credit score of 640 or higher typically get streamlined processing. With a credit score below 640, you still can qualify for a USDA loan, but the lender will ask for extra documentation about your payment history. Keep in mind that there are income limitations, which can vary by region.

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Assistance for Home Buyers

There are assistance programs that can help you with the dream of homeownership. Take a look through these resources and do some investigation to see if you qualify for assistance.