2 Programs for Low Income Home Loans
Low income home loans are available for consumers with low or modest income. Consumers that wish to become homeowners and current homeowners have options. Let’s look at the programs available for low income home loans.
Program #1 For Low Income Home Loans: FHA Loans
The borrower can use guaranteed government loans to buy a home, build a home, or make improvements to the home to an existing home. Financing is available for purposes of safety, improvements, additions and other items. A government guaranteed loan is amortized over 30 years.
To qualify you must have a low to moderate income. The borrower must be able to afford the proposed payment, as well as the cost of the interest, insurance, and taxes. These low income home loans offer an option for low income earners.
Program #2 For Low Income Home Loans: Veteran Home Loan Program
Unlike low income home loans, the VA does not directly lend money to the borrower, instead it guarantees the lending institute that should the veteran default on the mortgage or loan the VA will pay the balance owing. This program makes it easier for veterans who might not otherwise receive financing to do so.
The VA loan also caps closing cost, which can save the veteran a great deal of money at closing time. The VA home loan offers no down payment, longer repayment terms, and accurate assessment of the home the veteran is looking to buy. Should a veteran incur temporary financial trouble the VA will offer some leniency.
When you are buying a home using the VA program, the VA will do an appraisal of the property. However, an inspection to guarantee the house is free from defects is your responsibility. The VA does not require the correction of defects in order to be granted approval of the VA program.
The VA loan is flexible and can be approved to buy an existing home or build a new home. It can also be approved if the borrower wishes to make it energy efficient using some of the latest technology. To qualify for a VA loan the borrower must be a veteran who was honourably discharged and served active duty. The amount of active duty depends on which war the veteran served. The borrower’s debt ratio must be no more than 41% to qualify for the VA mortgage guarantee program.
Owning a home is considered a fundamental right and a part of the American dream. Many Americans do not own their own home and working toward purchasing. These 2 programs noted above, for low income home loans, help those who are less fortunate have the opportunity to become a homeowner if they want to.