Government Loans (FHA/VA/RD)

Government loans are loans that are guaranteed by one of two federal agencies (the Federal Housing Administration and the Veterans Administration), allowing lenders to lend you mortgage money with very little risk. While the government doesn’t lend the money, they do guarantee repayment to the lenders to protect them from any potential loss that may be incurred, in case of loan default and subsequent foreclosure.

Loan limits on government loans vary from region to region around the country, so please contact one of our Mortgage Planners for current loan limits.

New Hampshire Housing Finance Authority (NHHFA) & Maine State Housing Authority (MESHA) Loans

NHHFA & MESHA are public benefit corporations whose missions are to promote, finance and support safe, affordable and needed housing and related services for New Hampshire & Maine families, individuals and communities. As such, they operate a broad range of programs to assist low and moderate income persons and families in obtaining decent, safe and affordable housing.

Federal Housing Administration (FHA) Loans

FHA loans are administered by the Department of Housing and Urban Development (HUD). FHA loans are offered as 15 or 30 year fixed-rate mortgages and ARMs. The primary advantages of FHA loans are their low down payment requirements and their less stringent qualification terms.

Although FHA loans are not restricted to first-time home buyers, they are well suited for the first-time buyer. The FHA 1-year ARM product is particularly appealing due to its adjustment interval cap of 1% (vs. 2% on most conforming loan ARMs), and its lifetime cap of 5% (vs. 6% on most conforming loan ARMs).

Veterans Administration (VA) Loans

VA loans are made available to eligible veterans or the surviving spouse of a deceased veteran. These loans do not require a down payment, meaning financing is allowed up to 100% of the purchase price of the home being purchased.

Like FHA loans, VA loans offer flexible qualifying guidelines. However, these loans require a form of mortgage insurance regardless of your loan-to-value (i.e. down payment), to protect the lender from any potential loss that may be incurred, in case of loan default and subsequent foreclosure.

USDA – Rural Development Guaranteed Mortgage Program

USDA Rural Development (RD) loans are geared toward homebuyers who live in rural communities and have little to no money for a down payment. RD loans offer flexible, common sense underwriting guidelines relaxed credit requirements, no private mortgage insurance requirement, the ability to finance closing costs into the loan amount, lenient seller concessions, and rates that are comparable to conventional fixed rate mortgage programs.

The major benefits to a RD mortgage loan are:

• 100% loan-to-value based on the appraised value
• zero down payment required
• no limit on seller contribution or gift
• no cash reserves required
• 30 year fixed rate product
• competitive interest rates (comparable to conventional rates)
• flexible credit guidelines