Federal Housing Administration (FHA)

The FHA program provides mortgage insurance on loans made by FHA-approved lenders. This insurance protects lenders against loss due to homeowners defaulting on their mortgage. The cost of this insurance is split between an up-front portion, often financed into the loan amount, and a monthly payment, usually included in the monthly mortgage payment.

The program helps low- and moderate-income families become homeowners. And because lenders are insured against default, they can take risks by lending in situations which fall outside conventional and underwriting guidelines.

Veterans Affairs (VA) Loans

A Veterans Affairs (VA) Loan guarantees up to 25% of a home loan amount, up to $104,250, which limits the maximum loan amount to $417,000 and is available only to eligible veterans. The VA charges a funding fee for each loan, which varies with the amount of the down payment and the status of the borrower (reservist/active duty/veteran). The funding fee may be included in the loan amount. Not all veterans are automatically eligible for the program; they must first qualify.