To take advantage of the FHA loan’s 3.5 percent down payment, you’ll need a credit score of at least 580. Borrowers with credit scores below 580 may be able to qualify with a 10 percent down payment. But it’s also important to understand that FHA lenders can have credit score minimums that exceed what the government requires. If you’ve filed for bankruptcy, you’ll need to be at least two years removed from the filing and have since established good credit. If you’ve experienced a foreclosure, you must be three years removed for the foreclosure. Guidelines and policies on credit can vary by lender.

This is a one-time MIP payment you’ll make at closing. It costs 1.75 percent of your total home loan balance (not the home’s price), regardless of your credit score or debt-to-income ratio. 

Limits on FHA loans vary by location and property type. They amount to 115 percent of the county’s median home price, so they fluctuate every year as the local market changes. You can find your FHA loan limits using this tool at HUD.gov.

FHA lenders also offers jumbo loans, meaning loans in excess of the FHA limit for your area. For jumbo FHA loans, lenders may have tighter guidelines for minimum credit score, credit history, DTI ratio and more.

The USDA loan’s purpose is to provide affordable homeownership opportunities to low-to-moderate income households to stimulate economic growth in rural and suburban communities throughout the United States.

These rural development loans are available in approximately 97% of the nation’s land mass, which includes over 100 million people*

The VA Loan became known in 1944 through the original Servicemen’s Readjustment Act also known as the GI Bill of Rights. The GI Bill was signed into law by President Franklin D. Roosevelt and provided veterans with a federally guaranteed home with no down payment. This feature was designed to provide housing and assistance for veterans and their families, and the dream of home ownership became a reality for millions of veterans. The GI Bill contributed more than any other program in history to the welfare of veterans and their families, and to the growth of the nation’s economy.

With more than 25 million veterans and service personnel eligible for VA financing, this loan is attractive and has many advantages. Eligibility for the VA loan is defined as Veterans who served on active duty and have a discharge other than dishonorable after a minimum of 90 days of service during wartime or a minimum of 181 continuous days during peacetime. There is a two-year requirement if the veteran enlisted and began service after September 7, 1980 or was an officer and began service after October 16, 1981. There is a six-year requirement for National guards and reservists with certain criteria and there are specific rules concerning the eligibility of surviving spouses.

The VA will guarantee a maximum of 25 percent of a home loan amount up to $113,275, which limits the maximum loan amount to $453,100. Generally, the reasonable value of the property or the purchase price, whichever is less, plus the funding fee may be borrowed. Being a veteran doesn’t make a homebuyer automatically eligible for a home loan, you must meet both service requirements and credit/income requirements to be eligible.

VA guaranteed loans are made by private lenders, such as banks, savings & loans, or mortgage companies to eligible veterans for the purchase of a home, which must be for their own personal occupancy. The guaranty means the lender is protected against loss if you or a later owner fails to repay the loan. The guaranty replaces the protection the lender normally receives by requiring a down payment allowing you to obtain favorable financing terms.

Those who have been discharged, separated or retired should keep multiple copies of the DD214–your discharge paperwork. It’s the most important military document in your records. This is proof of your military status, whether you are retired, separated, discharged. It also displays the nature of your discharge, and what your status is with the National Guard or a Reserve Unit.

The lack of a DD-214 form can bring some of your VA processes to a halt, but fortunately you can get a replacement copy by writing to the National Personnel Records Center. Enclose a completed form SF-180 along with a letter stating the reason for your request, you name, rank, social security number. If you are a recently discharged military member who separated or retired at an overseas location, remember that your DD-214 form may be delayed overseas for up to a year before it becomes part of the National Record Center archives. If this is the case, you contact the orderly room, First Sergeant or Sergeant Major in charge of where you separated or retired and request a copy directly from your final base.

A VA home loan has more flexibility than you might think. While many use this benefit to purchase existing homes, there are many other applications. Did you know a VA home loan may be used to purchase and improve a home at the same time? You may also use a VA loan to improve your existing home by increasing energy efficiency. There is also a provision for people to use a VA loan to purchase a manufactured home and lot, under the right conditions. One great feature is the One Time Close Construction Loan (OTC) which allows you to purchase land and build the home of your dreams with one loan, one closing AND $0 down payment! There are many applications for a VA home loan, sometimes all you need to do is ask!