Government Loan Programs
There are several government loan options available today, each with it's distinct advantage.  Here is a brief list of loan programs currently available. 

FHA LOANS 

An FHA loan is insured by the Federal Housing Administration, an agency within the U.S. Department of Housing and Urban Development (HUD). 

FHA does not loan money to borrowers, rather, it provides lenders protection in case of borrower default with mortgage insurance funded by a borrower-paid mortgage insurance premium (MIP).  This, in turn, allows FHA loans with much lower down payments compared to conventional loans.

While there are geographic adjustments for maximum loan amounts, there are no income limitations with FHA loans.  FHA loan programs are particularly beneficial for those buyers with little cash available for a down payment.  Rates for FHA loans are comparable to conventional rates.   

Some benefits of FHA financing:

• A minimum down payment of 3.5%.
• Closing costs, up to 3% of the purchase price, can be paid by the seller.
• Specific portions of the closing costs can be financed as part of the loan.
• Lower monthly mortgage insurance premiums (MIP) than traditional private mortgage insurance (PMI) required for conventional loans.  
• More flexible underwriting criteria than conventional loans
• FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage).
• Right to prepaythe mortgage without penalties.
• Loans are assumable to qualified buyers, subject to qualification, when you sell your home.
• Loans are available to purchase a home, build a home, renovate a home or improve a home with energy-efficient improvements.

Click here to learn more about FHA mortgages.

VHDA LOANS 

VHDA (the Virginia Housing & Development Agency) offers a program called "FHA Plus" that provides a first trust insured by FHA and a second trust for the down payment loaned by VHDA. 

VHDA seconds can even exceed the property's purchase price, under specific conditions, so the borrower can include closing costs in their financing. 

Most of the parameters that apply to FHA loans apply to the "FHA Plus" program offered by VHDA.  Additionally, VHDA has some geographic and income limitations for VHDA loans.

Learn more about VHDA mortgages by clicking here. 

VA LOANS
Loans through the Veterans' Administration are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) for eligible veterans.  The guaranty means the lender is protected against loss up to a specific dollar amount if the borrower fails to repay the loan.  In most cases, no down payment is required on a VA guaranteed loan and the borrower usually receives an interest rate comparable to conventional loans.

Other benefits of a VA loan include: 

• Closing costs are comparable (and sometimes lower) than other financing types.  Costs can either by paid by the seller (up to 4% of the purchase price) and/or specific parts can be added to the loan.
• No mortgage insurance is required, meaning more of the monthly payment can go toward the mortgage, itself.  That equates to having more money for purchasing more house. 
• Borrowers have the right to prepay the loan without penalty.
• The mortgage can be taken over (assumed) by a buyer, if qualified, when you sell your home.
• VA loans can be used to purchase a home, build a home and even improve a home with energy-savings features such as solar or heating & cooling systems, water heaters, insulation, weather-stripping and/or caulking, storm windows and/or doors or other energy efficient improvements approved by VA.

Veterans must have a VA Certificate of Eligibility to obtain a VA loan.  There are loan limits for VA loans, based on geography.  

Learn more about VA loan programs by clicking here.

USDA LOANS

While not as well known nor as widely used, the Rural Development (RD) Guaranteed Rural Housing (GRH) program is an affordable housing program from the US Department of Agriculature (USDA).  The program focuses on and serves areas considered "rural" (by density, not geography) by USDA.

GRH has many of the same benefits of VA loan programs, including no down payment requirement, no Mortgage Insurance and the ability to allow a qualified buyer to assume the loan when you sell your home.  Like both VA and FHA, there is no prepayment penalty for these loans. 

GRH loans have both geographic and income limitations.

You can learn more about the GRH program by clicking here.