Key Features: • Down Payment: As low as 3.5% of the purchase price. • Credit Score: Minimum score of 580 for 3.5% down, though some lenders accept scores as low as 500 with a higher down payment. • Loan Limits: Varies by location; typically lower than conventional loan limits. • Mortgage Insurance: Requires both an upfront mortgage insurance premium (UFMIP) and monthly mortgage insurance premiums (MIP). Ideal Buyer: • First-time homebuyers or those with lower credit scores. • Limited savings for a down payment.
3. VA Loans (Veterans Affairs)
VA loans are exclusively available to active-duty service members, veterans, and eligible family members. These loans are backed by the U.S. Department of Veterans Affairs. Key Features: • Down Payment: No down payment required. • Credit Score: No official minimum, but most lenders prefer a score of 620 or higher. • Loan Limits: No maximum loan limit as of 2020, but borrowers must meet lender requirements. • Mortgage Insurance: No PMI required, but there is a one-time VA funding fee (waived for some veterans). Ideal Buyer: • Military members and veterans looking for affordable homeownership options. • Those without significant savings for a down payment.
4. USDA Loans (U.S. Department of Agriculture)
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