FHA home loan programs and VA home loan programs are very similar; they both attempt to give access to affordable home loans to the American people. The biggest difference between the two is that VA home loan programs have been created for America’s veterans of the armed forces. But between the two, would-be home buyers are served. Where one program may not be the best for a borrower, the other program fills in.
VA Home Loan Facts
VA home loan programs are made for qualified veterans as part of the benefits extended after serving in the military. But in order to qualify for a VA home loan programs, a veteran must meet specific criteria:
•A veteran must have a Certificate of Eligibility from the Department of Veterans Affairs.
• A veteran must have good credit (usually for the past two years) and an adequate credit score.
• A veteran must have enough income to repay the loan.
• A veteran must meet debt-to-income requirements as outlined by the VA home loan programs.
• The home must be used as a residence after closing or renovations are complete
Some other individuals also have VA home loan programs available to them, including:
National Guard or Reserve members who meet specific requirements. Widowed spouses of servicemen who died in duty, who have not remarried. U.S. citizens and their spouses who served with an Allied country during World War II.
VA Home Loan Benefits
• No down payment loans
•Good fixed and adjustable interest rates, regardless of credit history
• Lengthened and flexible terms of 15-30 years or more
• No prepayment penalty
• Assistance during financial hardship
•Protection and warranty against discrimination and poor buildings
But some who have just limited time in the armed forces or who cannot qualify for VA home loan programs may still be able to work with the FHA home loan programs. Also, those with no military experience can work with the FHA home loan programs.
FHA Home Loan Facts
For those who can’t take advantage of the VA home loan programs, there are FHA home loan programs available. While the FHA home loan programs do not have many advantages over the VA process, there are some. With the FHA programs, more than half of the loan is insured, a benefit not available in the VA, which should be considered by veterans.
FHA home loan programs are similar to VA loans in many other ways, aside from the insured benefit.
FHA Home Loan Benefits:
• Low down payment
• Federal security, which can mean better terms from lenders
• Flexible terms
•Adjustable payment options
• Good interest rates and affordable payments
• Refinance options for existing loans
Qualifying borrowers can benefit from either the VA home loan programs or the FHA home loan programs. By meeting the requirements of each program, borrowers can make their home ownership goals a reality with good terms and through these good programs.