Special Loan Progams

For people who qualify, special loan programs can be more affordable than a conventional or FHA loan, so make sure to check to see if you are eligible. Always compare official loan offers, called Loan Estimates, before making a final decision.

VA loan

The Department of Veterans' Affairs (VA) has a loan program for eligible veterans, current servicemembers, and surviving spouses. The loans are made by private lenders and guaranteed by the VA.

VA loans:

  • Often offer low-cost, streamlined refinance options and additional protections if you have trouble paying your mortgage later on.
  • Do not require monthly mortgage insurance premiums, but usually require an upfront fee at closing.
  • Are available with low or even zero down payments, but may be more expensive than conventional loans if you have significant down payment funds and good credit.

Mortgage insurance

The VA guarantee replaces mortgage insurance.
More on mortgage insurance.

USDA loan (or Rural Development Loan)

The US Department of Agriculture offers a similar program to the FHA and VA, designed for low- and moderate-income borrowers in rural areas.

USDA loans can be a good option for borrowers who have little available savings. They offer zero down payments and are usually cheaper than FHA loans. Borrowers will pay an upfront fee as well as ongoing mortgage insurance premiums to the USDA.

Find out if you're eligible.

Mortgage insurance

Required by all USDA loans.
More on mortgage insurance.

State and Local Programs

Many states, local governments, and nonprofits offer programs to make homeownership more affordable. Many of these programs focus on low- and moderate-income families buying their first home, though some may be available to families who have previously owned a home. Other programs target teachers, firefighters, and other public service employees, or people interested in purchasing a home in a particular neighborhood.

Many programs offer down payment assistance that can be used with a regular FHA or conventional loan. Some programs lend money directly through subsidized loans.

If you think you might qualify, explore programs in your area using this tool or contact a local housing counselor to discuss your options. You can also ask local lenders whether they offer any special programs.

Mortgage insurance

Required by many state and local programs.
More on mortgage insurance.

Mortgage insurance: what you need to know

Mortgage insurance helps you get a loan you wouldn’t otherwise be able to. If you can’t afford a 20 percent down payment, you will likely have to pay for mortgage insurance. You may choose to get a conventional loan with private mortgage insurance (PMI), or an FHA, VA, or USDA loan.

Mortgage insurance usually adds to your costs. Depending on the loan type, you will pay monthly mortgage insurance premiums, an upfront mortgage insurance fee, or both.

Mortgage insurance protects the lender if you fall behind on your payments. It does not protect you. Your credit score will suffer and you may face foreclosure if you don’t pay your mortgage on time.

Learn more about mortgage insurance.

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