Common National Home Buyer Programs

FHA Loans

This is the go-to program for many first-time homebuyers with lower credit scores. The Federal Housing Administration allows down payments as low as 3.5% for those with credit scores of 580 or higher. The FHA will insure loans for borrowers with scores as low as 500 but requires a 10%down payment for a score that low. Mortgage insurance is required for the life of an FHA loan and cannot be canceled.

Conventional Mortgage

First-time home buyers can get a conventional home loan with as little as 3% down if the mortgage meets requirements set by Fannie Mae and Freddie Mac. And if you put at least 20% down, you won’t have to pay mortgage insurance. Most lenders require a minimum credit score of 620 to qualify for a conventional mortgage, but a score around 740 earns you the best interest rates

VA Loans

Guaranteed by the U.S. Department of Veterans Affairs, these mortgages are available to military members, veterans, and surviving spouses. If you qualify, you’ll see benefits such as no minimum credit score and no down payment or mortgage insurance, but you'll likely have to pay a VA funding fee.

USDA Loans

A USDA home loan is a zero-down-payment mortgage for eligible rural and suburban home buyers. USDA loans are issued by the U.S.Department of Agriculture through the USDA Rural Development Guaranteed HousingLoan Program. There are income limitations, which vary by region. Applicants with credit scores of 640 or higher receive streamlined processing. Those with scores below that must meet more stringent underwriting standards.

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