There are three types of government-insured loans:

• Federal Housing Administration (FHA)
• FHA loans will consider borrowers with a credit score as low as 500 and / or a borrower with a 3.5% down payment. FHA loans always require mortgage insurance regardless of the loan-to-value (loan-to-value is calculated by taking the requested loan amount and dividing by the lower of the sales price or appraised value).
• On all FHA loans, the borrower will pay an upfront mortgage insurance premium (UFMIP) and an annual mortgage insurance premium (MIP)
• The UFMIP is paid at closing or can be rolled into the loan amount. In some cases, you can increase your rate and have the lender cover the cost of the UFMIP. It is a one time fee paid at closing.
• The MIP percentage can vary based on loan amount and loan-to-value. It is calculated by taking the (loan amount x MIP %) / 12.  The MIP is paid on a monthly basis.
• Please ask your loan officer for the current UFMIP and MIP being charged by FHA for your specific transaction.  
• You are not required to be a first time homebuyer when applying for an FHA loan. However, if you are vacating one property and plan on renting it out while using FHA financing to purchase another property, there is a 100 mile rule imposed by FHA. Please discuss with your loan officer if you will be renting out one property to purchase another property using FHA financing.
• FHA loans can only be used to purchase or refinance a 1-4 unit primary residence.
• US Department of Agriculture (USDA)
• USDA loans offer 100% financing for eligible borrowers who wish to purchase or refinance a property located in a rural area or in a suburban area adjacent to a rural community.
• Eligible borrowers must be low-to-moderate income borrowers. When discussing USDA loans, your loan officer can determine the maximum income limit for the USDA program in a designated area.
• USDA loans do charge a one-time upfront ‘Guarantee Fee’ and an annual fee. The annual fee is paid monthly ( loan amount x annual fee %) / 12.
• Please ask your loan officer for the current guarantee fee and annual fee being charged by USDA for your transaction.
• You are not required to be a first time homebuyer when applying for a USDA loan.
• USDA loans can only be used to purchase or refinance a 1 unit primary residence.

• US Department of Veteran Affairs (VA)
• VA loans are specifically for active, discharged or separated, or retired members. 100% financing is available for borrowers eligible for VA loans. Credit guidelines can be flexible with aggressive debt-to-income ratios.
• Mortgage insurance is not charged on any VA loan regardless of the loan-to-value.
• A ‘VA Funding Fee’s is charged based on the loan transaction (purchase/ streamline refinance / cash out refinance) and if the borrower is obtaining their first VA loan or if they are obtaining a subsequent VA loan. This fee must be paid at closing through a lender credit, seller credit, borrower’s own funds, or rolled into the loan amount.
• The VA Funding Fee can be waived if the borrowers’ Certificate of Eligibility (COE) indicates that the VA funding fee can be waived.
• There is no annual fee charged by VA on their loans.
• VA loans can only be used to purchase or refinance a 1-4 unit primary residence.