About Government Refinance and Home Purchase Programs

As we discuss on our home purchase page, there are several government-backed home purchase programs available. The main categories of programs are Fannie/Freddie loans, FHA loans, VA loans, and USDA rural housing loans. Each has advantages and disadvantages. Below is a list of some pluses and minuses of each program.

Fannie/Freddie loans

+ No up front fees
+ No PMI when you have more than 20% equity

– Requires at least 5% down payment
– Normally requires good credit scores and history

FHA loans

+ Only requires 3.5% down payment
+ Much more lenient on credit scores and past credit problems

– Has a 1.75% up front fee that rolls into loan
– Requires monthly PMI fee for the life of the loan

VA loans

+ Zero down payment required
+ No PMI

– Must have military experience to be VA eligible
– Charges up front fee of at least 2.25% of loan (unless borrower has disabled status)

USDA Rural Housing loans

+ Zero down payment required
+ Much smaller upfront fee and ongoing pmi-like fee than FHA

– Only applicable in areas deemed “rural” by USDA
– Requires good credit scores and history
– Has upper income limits — borrowers who make too much not eligible

All of these programs are excellent overall. It’s mostly a matter of which program fits best. Contact us today at our home purchase page to learn more about which program fits best for you and to get pre-qualified for a home purchase loan.