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GinnieMae guarantees Government Mortgage Loans because they are insured by different Federal Agencies according to the mortgage loan program. The Government mortgages offer attractive terms and are preferred by the first-time home buyers. They feature:
- Low down payments
- Flexible lending guidelines
- Easier qualification
- Low closing cost
Government Mortgage Loan Programs are:
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The Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development (HUD), administers various mortgage loan programs. FHA's maximum loan amount varies, depending upon the county where you live. It is critical that the loan amount, including closing costs (if you finance your closing costs), not exceed the maximum loan amount in your county set by FHA.
- Benefits:
- There are no income limits on FHA loans.
- FHA offers more relaxed credit quality, income, and asset requirements.
- You can use a non-owner occupant as a co-borrower. In other words, your co-borrower doesn't have to live in the home with you.
- If rates fall and you want to refinance, you won't have to pay for a new appraisal or credit report.
- Basic FHA Loans allow you to purchase a home with as little as a 3% down payment. In many cases the down payment can come from a gift by a friend, relative or co-worker.
- The Federal Housing Administration (FHA) does not make the loan. It only insures the loan made by approved lenders.
- Warning:
- The mortgage insurance premium (MIP) paid on an FHA loan can be higher than on standard (conventional) financing
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The VA Loans are guaranteed by U.S. Dept. of Veterans Affairs. The guaranty allows veterans and service persons to obtain home loans with favorable loan terms, usually without a down payment. In addition, it is easier to qualify for a VA loan than a conventional loan. This is because the loans are guaranteed by the U.S. Department of Veterans Affairs. Lenders generally limit the maximum VA loan amount.
The U.S. Department of Veterans Affairs does not make loans. It guarantees loans made by lenders. VA determines your eligibility and, if you are qualified, VA will issue a certificate of eligibility to be used in applying for a VA loan.
VA-guaranteed loans are obtained by making application to private lending institutions.
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The Rural Housing Service (RHS) of the U.S. Dept. of Agriculture guarantees loans for rural residents with minimal closing costs and no down payment.
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Reverse mortgage is a mortgage loan program designed for seniors (62 and over). The reverse mortgage releases the home equity in the property either as one lump sum or in multiple payments. The homeowner's obligation to repay the loan is deferred until the owner lives, the home is sold, or the owner leaves the property (e.g., into aged care).
The reverse mortgage does not have fixed duration, therefore the reverse mortgage programs do not have fixed interest rates. Almost all reverse mortgage programs are Adjustable Rates Mortgages, adjusted on an annual, semi-annual, or monthly basis. Since there are no payments made during the course of the loan the interest accrued is then added to the principal of the loan.
Read more about Reverse Mortgages
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