Government Programs for Homeowners

There are a lot of homeowners’ assistance programs funded by government and private organizations. These programs may assist you in achieving your dream home.

According to the mortgage reports, there are more than 2000 homeownership programs available. These programs can be categorized into many types depending upon the type of assistance provided. It can be in the form of a grant or gift that doesn’t need to be repaid or different types of loans. The requirements associated with each assistance program are different. It is better if you are aware of all the requirements and options available at your hand before choosing one program.

In this post, we will mainly target on homeownership program funded by the government:

HUD(Department of Housing and Urban Development) has launched plenty of programs to help you purchase the homes. Depending upon the program, the requirements vary, so you have to check which program suits you.

  • FHA Loans:

FHA (Federal Housing Administration), a part of HUD, allows easy mortgages with less strict eligibility requirements. Though the program is popular amongst first-time home buyers, it is equally beneficial for others.

This program has a down payment of 3.5% of the purchase and has a credit score of 580. Also, the house must be priced within the loan limit of the FHA home.

To get this loan, you need to find an FHA-approved lender. If your credit score is between 500 – 579, the down requirement increases up to 10%.

If you have good credit and have to pay 10-15% of the down payment, a conventional loan is better than an FHA loan.

  • Homeownership Vouchers

This program lets the low-income first-time homebuyers in the HCV program use their vouchers for monthly mortgage payments and other expenses. You have to contact your local Public Housing Agency (PHA) to know whether they offer this program or not.

  • VA Loans

The Department of Veterans Affairs provides loans to active duty service members, veterans, and surviving spouses. Private lenders offer VA loans, but VA guarantees a significant portion of the loan.

The buyer must have a certificate of eligibility (COE) for the loan.

  • FHA 203(k) Loan

This rehabilitation loan can be a good option for those who want to buy a fixer-upper home at cheaper rates to fund repairs and renovations. It also works for buyers who wish to customize homes according to their personal choice.

To be eligible for FHA 203(k) loan, the applicant must have a credit score of 640 and make a down payment of 3.5% of the purchase price.

  • USDA Home Loan

It assists low to moderate-income families to buy a home in rural areas with no down payment and 100% financing. It can be used for repair or renovation, making property energy efficient, or installing necessary household appliances.

  • Good Neighbor Next Door HUD Loan

It is a unique home buying program for public service workers. It allows them to purchase a home at half of the list price.

  • Energy Efficient Mortgage

It is insured by FHA and VA and allows homeowners to purchase energy-efficient homes.

  • Local and State Loans

There are also city or state-insured assistance programs. They typically help first-time and low to moderate-income homebuyers. 

  • HomePath Ready Buyer

This program is operated by Fannie Mae and offers mortgage options to low and moderate-income families. It targets first-time homebuyers who have to complete an online educational course to be eligible for the loan.