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Government-Backed Loans – Regime loans cite to those loans that are guaranteed by one of two federal agencies. The two types of authorities loans are: Federal Housing Administration (FHA) loans, and Veterans Administration (VA) loans. The advantage of financing using FHA loans are that they are easier to qualify for and allow a borrower to finance more of the loan quantity than non-government loans. Whereas with a Conforming loan a borrower may alone be able to finance 80% of the loan amount, a FHA loan allows a borrower to finance 97% of the loan amount. FHA loans are recommended for those borrowers who are first-time buyers, get small money to placed down, experience a short credit history, or are having trouble qualifying for a Conforming loan. The two principal advantages of financing employing VA loans are that the VA allows borrowers to finance 100% of the loan amount, and that, the VA only requires proof of veteran status to qualify for the loan. The exclusively drawback to government loans is that mortgage insurance is taken at all loan to values (LTV), unlike Conventional and Jumbo loans where payment of mortgage insurance is determined by the measure of equity a borrower has in his home.
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