Government-Guaranteed Financing Programs

Government-guaranteed financing programs include loans insured by the Federal Housing Authority (FHA) and loans guaranteed by the Veterans Administration (VA). I currently have an FHA loan, which is probably the most commmon type of mortgage used by first time home buyers. These agencies help home buyers obtain low-interest, low-down-payment loans. Most low- and middle- income people can qualify for the FHA loan program. The minimum down payment ranges between 3 and 5 percent, depending on the size of the mortgage. The lower down payment makes it easier to buy a home. Also FHA interest rates are lower than market interest rates, since the FHA's involvement lowers the risk.