Government loan programs available to Pa residents
FHA government mortgage loans in Pennsylvania
An FHA mortgage loan is insured by the Federal Housing Administration, a federal agency within the U.S. Department of Housing and Urban Development (HUD). The FHA does not loan money to borrowers, rather, it provides lenders protection through mortgage insurance (MIP) in case the borrower defaults on his or her loan obligations. Available to all buyers, FHA mortgage loan programs are designed to help creditworthy low-income and moderate-income families who do not meet requirements for conventional loans.
FHA mortgage loan programs are particularly beneficial to those buyers in Pennsylvania with less available cash. The rates on FHA mortgage loans are generally market rates, while down payment requirements are lower than for conventional loans.
Some of the other benefits of FHA mortgage loans are:
- Only a 3 percent down payment is required in many cases
- Closing costs can be financed on a Pa mortgage loan
- Lower monthly mortgage insurance premiums and, under certain conditions, automatic cancellation of the premium.
- More flexible underwriting criteria than conventional loans
- FHA limits the amount lenders can charge for some closing cost fees (e.g. the origination fee can be no more than 1% of mortgage) in some cases.
- FHA mortgage loans are assumable to qualified buyers.
VA government Loans in Pennsylvania
VA guaranteed loans are made by lenders and guaranteed by the U.S. Department of Veteran Affairs (VA) to eligible veterans for the purchase of a home. The guaranty means the lender is protected against loss if you fail to repay the loan. In most cases, no down payment is required on a VA guaranteed mortgage loan and the borrower usually receives a lower interest rate than is ordinarily available with other loans.
Other benefits of a VA mortgage loan include:
- Negotiable interest rates.
- Closing costs are comparable and sometimes lower - than other financing types.
- No private mortgage loan insurance requirement.
- Right to prepay loan without penalties
- The Mortgage loancan be taken over (or assumed) by the buyer when a home is sold.
- Counseling and assistance available to veteran borrowers having financial difficulty or facing default on their mortgage loan.
Although mortgage insurance is not required, the VA charges a funding fee to issue a guarantee to a lender against borrower default on a mortgage. The fee may be paid in cash by the buyer or seller, or it may be financed in the loan amount.A VA mortgage loan can be used to buy or build a home in Pennsylvania and even improve a home with energy-saving features such as solar or heating/cooling systems, water heaters, insulation, weather-stripping/caulking, storm windows/doors or other energy efficient improvements approved by the mortgage lender and VA. Veterans can apply for a VA mortgage loan with any Pa mortgage lender or broker that participates in the VA home loan program. A Certificate of Eligibility from the VA must be presented to the lender to qualify for the loan.
For more information on government loans in PennsylvaniaCall us at 800-757-1990 or email us at LoanDept@NetEquityLoans.com