Government Mortgages

One of the fundamental tenants of the American Dream has been property ownership–home ownership.

And for that reason, the US government has always actively supported and offered many government mortgage programs. However, they don’t tend to have the big marketing budget of banks and mortgage lenders, so you might not know about all the government mortgage assistance available for your home refinance or buying.

Morning Mortgage Notes wants to help you find all the Government Home Loan assistance you might be qualified for to help you refinance your mortgage or buy a new home.

Government Loan Modification Programs

In response to the recent mortgage meltdown and housing market collapse the US government has create several loan modification programs and mortgage lender incentives to assist troubled borrowers. These programs are generally targeted at homeowners who have experienced an unexpected financial hardship.

Home Affordable Mortgage Program (HAMP) -Often referred to as the Making Home Affordable Program, this government loan modification program was created by President Obama’s Administration to help troubled borrowers. The intent of this government initiative was to help homeowners unable to afford their current mortgage payment to refinance or modify their mortgage under conditions of financial hardship.

Also included in this program is the Home Affordable Foreclosure Alternatives Program to assist homeowners that would like to consider short sale or deed-in-lieu of foreclosure options.

Learn more about government loan modification options.

Government Mortgage Loans & Assistance

The first areas of mortgage assistance we’ll discuss are the most basic of government mortgages and mortgage insurance programs. These are programs simple targeted at making housing more affordable for all Americans.

Generally, each of these programs are defined by property type and have specific eligibility requirements based on the specific nature of that category of housing.

FHA Home Loan

The Federal Housing Administration (FHA) has always been focusing on insuring mortgages to secure the affordability and availability of single-family housing to as many Americans as possible. In the current economic environment and based on several legislative actions to loosen the qualification requirements (i.e., increasing loan limits and decreasing downpayment requirements) even more home buyers and even homeowners refinancing are eligible for this government mortgage program.

An FHA Loan is one that is made through an FHA-approved lender and qualifies for one of a number of HUD/FHA mortgage insurance programs.

Learn more about an FHA Home Loan.

Condominium Mortgages

FHA can also assist you in securing a mortgage on a condominium. Condos have some unique features that most be considered for this type of government mortgage eligibility. Most importantly the condominium community itself needs to be FHA approved, meeting certain requirements of occupancy and sales. Here are some examples of pecial rules that apply to condominium FHA mortgages:

• The condominium project must not have more than 50 percent of its units with FHA-insured mortgages
• At least 50 percent of the condo units must be already sold or occupied
• Condo communities must be FHA approved via HRAP or DELRAP process (no more “Spot Approvals”)
• The borrower may need a special insurance coverage policy based on the details of the HOA’s master policy

Learn more about FHA Condominium Mortgages at HUD.gov.

Coop Mortgages

The FHA also provides government mortgage assistance for cooperative housing projects. These 213 FHA mortgage insurance provisions can provide government-backed mortgage loans for the construction, rehabilitation, and purchase of cooperative housing projects.

Coop housing projects are housing developments (often in large cities and high-rise apartments) that allow members to purchase shares of ownership in the whole housing project with the exclusive right to occupy a specific unit and to participate in project operations through the purchase of stock. Section 213 FHA mortgage insurance also allows significant flexibility in allowing investors to provide multi-family housing to non-profit corporations or trusts.

Learn more about FHA (Section 213) Coop Mortgages at HUD.gov.

Manufactured Home Mortgages

HUD provides government mortgage insurance for manufactured homes and associated lot. This government-backed mortgage option insures private lenders against losses of up to 90 percent–increasing the lending options for borrowers buying manufactured housing.

Title I (the official authority for the HUD government mortgage insurance program) insurance programs may be used for loans on manufactured homes and lots of up to $92,904 or $22,226 for just the lot.

Learn more about Manufactured Home (Title I) Mortgages at HUD.gov.

Rural Housing Mortgages, Loans, and Grants

The government provides single-family home mortgage assistance to low and moderate income rural families through a variety of loan, grant, and loan guarantee programs. These programs are managed through the United States Department of Agriculture (USDA).

The following are some of the available rural home loan opportunities and high-level eligibility requirements:

• Rural Housing Guaranteed Loan - Borrowers may qualify with household incomes up to 115 percent of the median income for the area.
• Rural Housing Direct Loan - These are Section 502 loans and intended to assist low-income individuals or borrowers purchasing in rural areas. These loans are intended to be used to build, repair, renovate, or relocate a rural home. Loan proceeds may also be used to improve the home site (i.e., water and sewage improvements).
• Rural Repair and Rehabilitation Loan and Grant – This program is designed to provide government loan assistance for very low-income homeowners to repair, improve, or modernize their homes and/or remove health and safety hazards. This is one of the few government loan programs that are directly funded by the government.
• Additional Rural Loans and Grants include: Mutual Self-Help Loans, Rural Housing Site Loans, Housing Application Packaging Grants, Individual Water and Waste Grants, Self-Help Technical Assistance Grants, Technical and Supervisory Assistance Grants.

Learn more about Rural Home Loans and Grants at USDA.gov.

VA Home Loans

The US Department of Veterans Affairs administers government loan benefits for active duty, reserve, national guard, and veteran members of the armed forces. These mortgage benefit programs begin with the “certificate of eligibility” to qualify for a VA-backed home loan.

The following categories of military service members qualify for a certificate of eligibility:

• Veterans
• Active duty personnel
• Reservist/National Guard members
• Certain categories of spouses

Learn more about VA Home Loan Benefits at VA.gov.

Indian Home Loan Guarantee Program

The US government, through HUD provides mortgage assistance to low-income Native Americans, ALaskan Natives, and Hawaiian natives. These government loan benefits are administered by the Office of Native American Programs (ONAP).

Learn more about Indian Housing and Mortgage Programs at HUD.gov.

Government Loans for Community Revitalization

203k Rehabilitation Mortgage Insurance

The US government has a keen interest in revitalizing homes and communities that have fallen into disrepair or need modernization to be desirable. This is precisely the purpose of 203k Rehabilitation Mortgage Insurance, sometimes referred to as 203k Rehab Mortgages or Home Loans.

These government assisted mortgages are designed for handy individuals willing to exchange “sweat for equity.” If you are considering buying a home that needs repair or modernization this might be an opportunity to finance those materials and repairs into the mortgage and avoid costly construction loans. A 203k mortgage can also reduce the amount of down payment required for your mortgage.

Learn more about a 203 k Rehab Loan at HUD.gov.

203 h Mortgage Insurance for Disaster Victims

The US government helps victims in Presidentially designated disaster areas to recover their housing by providing government mortgage assistance through the 203h Mortgage Insurance of Disaster Victims program. Prospective home buyers and borrowers are eligible for this government assistance if they meet the following criteria:

• Their homes were located within a area that was designated by the President as a disaster area
• Their homes were destroyed or damaged and require reconstruction or replacement
• Insured mortgages must be a single-family home and the primary resident of the borrower

Learn more about a 203h Disaster Victims Mortgage at HUD.gov.