Government Home Loans
Government home loans can help low income families afford the home of your dreams.
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Since 1934, the Federal Housing Administration (FHA) has been dedicated to improving housing and helping to finance mortgages for low income families. In the 1940's it helped to finance homes for returning military familes and has helped to finance housing for low income families as well as the elderly and handicapped throughout the 20th century.
There are many types of government home loans and special programs that are available for a short time only. A good loan officer can alert you to when these loans come up, but you will have to act quick to take advantage.
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The FHA, however works all the time to insure funds are available for low interest rate loans. It does not five out loans itself, but works behind the scenes with banks to insure that lenders have the funds to allow low income families to get mortgages.
Are there income limits?
Of course, the limits of government home loans differ per state and county, but generally there are limits. These loans usually have a cap as to how much the will lend so typically only the lower price range homes will qualify.
Will You Qualify?
In order to qualify for government home loans, you have to have a good credit rating and reasonable debt to income ratio. The bank wants to make sure you can and will repay the loan! Before applying for a mortgage, take a look at your credit report and clean up any errors. If you have filed for bankruptcy or had a foreclosure in the last year or 2, you may need to wait a while and continue to make payments on time to re establish your good credit before you can get a loan.
Government home loans also require that you don't have too many loans out or owe too much money to afford your new payments. This is called debt to income ratio. The maximum ratio is 29% of your family income. This means that your monthly payments cannot exceed 29% of your monthly pay before any deductions are taken for insurance, savings, but after taxes. Of course, they will also weigh in your other loans and credit card debt so pay those down as much as you can.
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