So you’re thinking of buying a house. But, after doing some research, you’ve found that houses are much more expensive than you thought they’d be. Don’t worry; you’re not alone. The cost of housing has increased significantly over the past few years, and it doesn’t seem to be slowing down anytime soon.
But don’t despair. There are plenty of services out there that can help make a house more affordable. Here are a few of them:
Government-sponsored Enterprise (GSE)
A government-sponsored enterprise (GSE) is a type of financial institution created by the government to enhance the flow of credit to specific sectors of the economy. The two largest GSEs in the United States are Fannie Mae and Freddie Mac, established in 1938 and 1970. These two institutions purchase mortgage loans from banks and other lenders, giving them the capital necessary to make more loans and expand their lending operations.
In addition, the GSEs securitize mortgages, meaning they package the loans into securities that can be sold to investors. This helps to create a liquid market for mortgage loans, making it easier for borrowers to obtain financing. As a result, GSEs play an essential role in ensuring that housing markets remain healthy and accessible.
Veterans Affairs (VA) Loan Program
The Veterans Affairs (VA) loan program is a great way for eligible veterans to finance the purchase of a new home. The VA loan program offers several benefits, including low-interest rates and no down payment requirements. In addition, the VA loan program does not require private mortgage insurance (PMI), making it an affordable option for many veterans.
To qualify for a VA loan, you must have served in the military for at least 90 days or been honorably discharged from active duty. In addition, your spouse may be eligible for a VA loan if they were killed in action (KIA) or died due to service-related injuries. If you are interested in applying for a VA loan, you can contact your local VA office or visit the VA website to learn more about the program.
Department of Agriculture’s (USDA) Rural Development Program
The USDA’s rural development program for housing provides loans and grants to help low-income families improve their homes or buy new ones. The loans are available at low-interest rates and can be used to fund various repairs, including improving energy efficiency, making accessibility improvements, or making necessary repairs. The grants can be used to help with down payments or closing costs.
Additionally, the program offers technical assistance to help homeowners plan and construct their projects. For more information about the program, visit the USDA’s website. There you can find eligibility requirements, application instructions, and more.
Federal Housing Administration (FHA) Loan
FHA loans are a type of mortgage loan insured by the Federal Housing Administration (FHA), a government agency. These loans are available to all borrowers, including first-time house buyers and those with lower credit scores. The main benefit of taking out an FHA loan is that it enables borrowers to provide a smaller down payment than they would with a conventional mortgage.
For example, you might put less than 4% down on an FHA loan, while you would need to put 10% or more down on a conventional loan. In addition, FHA loans have more flexible credit requirements than conventional ones, making them a good option if you have had some financial challenges. If you think an FHA loan might be right for you, contact a mortgage lender today to learn more.
State and Local Programs
You may be surprised to learn that there are a number of state and local programs that offer assistance to homebuyers in the form of grants and low-interest loans. These programs can be a great way to help you get into your dream home, especially if you are having difficulty coming up with the down payment.
The first step is to check with your state housing finance agency to see if there are any programs available in your area. You may also want to check with your local government to see if they offer any type of assistance.
In addition, there are a number of nonprofit organizations that offer down payment assistance programs. These programs typically have income and other eligibility requirements, so be sure to check the requirements before applying. With a bit of research, you might find the perfect program to help you buy your dream home.
As you can see, there are plenty of options available to make buying a house more affordable. If you’re thinking about buying a house, be sure to remember government-sponsored enterprises (GSE), Federal Housing Administration (FHA) loans, Veterans Affairs (VA) loan programs, and USDA’s rural development programs. With these options in mind, you can be on your way to homeownership in no time.