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Monday, May 28, 2012

FHA And VA Loans

FHA and VA loans

Government loan programs have been created to help more people live the American Dream and own a home. Not everyone can qualify for conventional loans. They can have down payments of 20%, and in this economy there are not very many people that have that kind of money saved, especially if you are trying to buy a home in Manhattan, Brooklyn or Long Island. Conventional loans also have some pretty strict financial requirements, so if you don’t have perfect credit it can also be hard to qualify for. There are two major types of government insured loan program available for people living anywhere in New York, Kings, Nassau and Suffolk counties. There is the FHA loan and the VA loan.

FHA, or Federal Housing Administration home loans, were created and insured by the Federal Housing Administration. This is a loan program that pretty much anyone can qualify for. The main limitation to remember is there is a loan limit. The loan limit for a home in Manhattan, Brooklyn and Long Island is $729,750. This is actually a much higher loan limit then you’ll find anywhere else for a FHA loan in New York. With home prices being higher in these areas, it opens the door for you to choose a wider array of properties. The main advantages of a FHA loan are that you don’t need a huge down payment; FHA loans have a 3.5% down payment. That means if you were to purchase a property that cost $700,000 with a FHA loan you would only need $24,500 compared to a typical 20% down payment on a conventional loan which would be $140,000. Also closing costs tend to be less and the credit requirements are lower. You add this all together a FHA loan can make owning a home much more of a reality. If you are a 1st time home buyer that FHA can be the perfect loan for you. There is no need to rent when you can own, just let a FHA loan help.

VA, or Veteran Administration, home loans were created and insured by the Veterans Administration. They were created to help veterans and their families own homes easier. You have to qualify as active duty or veteran to qualify (to get more details on if you qualify click to visit the VA requirements page). The biggest advantage by far of a VA loan is that you can own a home for NO MONEY down, that’s right you can own a home without making a down payment. In fact it’s the only loan available in Manhattan, Brooklyn or Long Island that offers that. The VA loan is considered one of the premier loan programs available, not just because you don’t have a down payment. They are also much easier to qualify for then any other loan program. In fact most people who qualify for a VA loan wouldn’t qualify for a conventional loan. If you’ve served or are serving our country you need to look into a VA loan. The only limitation is that there is a loan limit of $625,500.

Government loans are great alternatives to conventional loans.