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5: Make Your Housing Plan — I Want to Own

Special Lending Programs

Owning a home is called the American Dream, but not everyone qualifies for a conventional fixed-rate loan. 

Many first-time homebuyers may not know they are eligible for government assistance programs backed by the Federal Housing Administration (FHA). Here is a sample of some loans for which you may qualify.

  • Pros
    • Low down payments; as low as 3.5 percent of the purchase price
    • Flexible standards for credit qualification
  • Cons
    • A monthly private mortgage insurance premium is charged to protect the lender in case of default on the loan
  • Who Qualifies
    • Mostly first-time home buyers
    • Could be for refinancing if little equity has been built
  • Pros
    • No down payment
    • No private mortgage insurance premium
    • Easier than conventional loans to qualify with lower credit rating
  • Cons
    • There are limits on what can be borrowed
  • Who Qualifies
    • Most active duty military and veterans
    • Reservists or National Guard with more than six years of service
    • Spouses of service members who died in line of duty or as a result of service-connected disability
  • Pros
    • Offers qualification to individuals who show a willingness and ability to repay
    • Low interest rates
    • No down payment
  • Cons
    • Limitations on income eligibility and location
  • Who Qualifies
    • Varies, but most participants must qualify based on income levels and be in a designated rural area
    • Also available for elderly, disabled or rural residents in multi-unit housing

SAM tips

Read more about the various loans at USA.gov, U.S. Department of Veterans Affairs, and U.S. Department of Agriculture. You also can find more information about other federal, state and local programs at HUD.gov.

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