If you are ready to purchase a home, it is smart to see if there are any mortgage loan programs that you qualify for. Mortgage loan programs offer various benefits, from lower down payments to assistance with closing costs. Finding a mortgage loan program that works for you can help you save on the cost of purchasing a new home.
Federal Housing Administration Loan
A Federal Housing Administration loan, or FHA loan, is specifically designed for people who want to purchase a home but don't have a really high credit score or a lot of savings for a traditional down payment.
You can qualify for an FHA loan with a lower credit score, and only have to put down between 3.5%-10% as a down payment based on your credit score. You do have to pay for mortgage insurance with this type of loan.
U.S. Department of Agriculture Loan
The U.S. Department of Agriculture has a unique loan program that is geared to people with medium to low incomes who want to purchase a home in a rural area. You still need a pretty decent credit score of at least 640. However, you often don't have to place a down payment, and if you do, it is generally really affordable.
These programs are great for people with average incomes and a decent credit score who are interested in living in more rural areas.
Good Neighbor Next Door
The Good Neighbor Next Door program is specifically designed for law enforcement personnel, teachers, firefighters, and emergency medical technicians. The program is backed by the U.S. Department of Housing and Urban Development.
This program allows you to get a steep discount on the list price of homes that are located in revitalization areas, which are areas the U.S. Department of Housing and Urban Development are hoping to help transform. In return, you get an actual discount on the price of the home, but the home is sold as-is, so you need to be ready to do a little fixing-up of the home. You also have to live in the home for a set amount of time before you can sell it; if you sell it before that time period, you will be penalized.
When it comes to purchasing a home, there are a wide variety of mortgage loan programs that allow you to purchase a home with a smaller down payment. These programs usually have some stipulations, such as income, credit score, or job requirements, so you may need to shop around to find the right conforming loan programs for your situation.
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