Loan Programs for All Home Buyers

An adjustable-rate mortgage (ARM) is a loan with a variable, rather than fixed, interest rate. With this type of mortgage, the initial interest rate will be fixed for a certain period, but the interest rate that is applied to the outstanding balance will eventually reset at least once per year. A benefit of an ARM is that it usually has lower monthly payments in the beginning stages, making it a good choice for buyers who don’t intend to keep their property longer than a few years.

A conventional mortgage is not backed by the federal government. Instead, it conforms to loan limits set by the Federal Housing Finance Agency (FHFA) and is originated and serviced by private lenders, such as banks, credit unions, and other financial organizations. Conventional mortgages are more difficult to qualify for, so having a strong credit score would be advantageous when applying.

An FHA mortgage is provided by the Federal Housing Administration and therefore is insured by the government. In general, these loans require a lower minimum down payment than conventional loans. Many first-time buyers will opt for an FHA mortgage, and since banks are already insured by the FHA, they are more willing to provide financial assistance.

A fixed rate mortgage comes with a set APR that will not change over the life of the loan. These mortgages are desirable for borrowers because they allow them to easily predict how much they need to pay each month. The only downside to fixed rate mortgages is that they typically have a higher payment policy than those that aren’t fixed.

A jumbo mortgage is used when the amount to be borrowed exceeds the limits set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, jumbo mortgages cannot be purchased, guaranteed, or securitized by the government-sponsored enterprises Fannie Mae or Freddie Mac. These loans are often used to finance expensive properties in a competitive real estate market.

A USDA mortgage is insured by the U.S. Department of Agriculture (USDA) and used to provide financing assistance to buyers in rural areas.

State housing programs are offered in most states for low- to moderate-income applicants or first-time homebuyers.

VA mortgages are provided by the U.S. Department of Veterans Affairs to help veterans and active-duty military members finance their first home.

First-Time Homebuyer?

Read our complete first-time homebuyer’s guide. If you have any further questions, feel free to contact us today!

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