FHA Loan is a federal assistance Mortgage loan in the United States insured by the Federal Housing Administration. The loan may be issued by federally qualified lenders

Why FHA Loans?

FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford.

The program originated during the Great Depression of the 1930s, when the rates of foreclosures and defaults rose sharply, and the program was intended to provide lenders with sufficient Insurance. Some FHA programs were subsidized by government, but the goal was to make it self-supporting, based on insurance premiums paid by borrowers.

Over time, private Mortgage Insurance (PMI) companies came into play, and now FHA primarily serves people who cannot afford a conventional Down Payment or otherwise do not qualify for PMI insurance.

A VA loan is a mortgage loan in the United States guaranteed by the Veterans Administration. The loan may be issued by qualified lenders.The VA loan was designed to offer long-term financing to American veterans or their surviving spouses (provided they do not remarry). The VA loan allows veterans 100% financing without private mortgage insurance or 20% Second mortgage.

A VA funding fee of 0 to 3.3% of the Loan amount is paid to the VA and is allowed to be financed. In a purchase, veterans may borrow up to 100% of the sales price or reasonable value of the home, whichever is less. In a Refinance, veterans may borrow up to 90% of reasonable value, where allowed by state laws.