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There are many factors
to consider when applying for a government
loan. We will be by your side every step of the
way. Below is some helpful information to help
get you started.
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The Federal Housing Administration was
started in 1934 as part of the new deal. The
FHA's goals have remained the same through out
the years and they are to contribute to
building and preserving healthy neighborhoods
and communities, maintain and expand
homeownership, and to stabilize credit markets
in times of economic disruption.
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The FHA now offers a variety of loan
programs to a large population and FHA
mortgages can have fixed or adjustable interest
rates. Many find these home loans attractive
because they require very small down payments,
gifts can be used for down payments and closing
costs, and because the FHA regulates the
closing costs. These loans also have
qualifications that are easier to meet than
traditional mortgages. The FHA does not require
a minimum FICO score to meet qualifications and
these programs will allow home purchase two
years after a bankruptcy filing.
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Energy Efficient Mortgages, EEMs,
recognize that reduced utility expenses can
permit a homeowner to pay a higher mortgage to
cover the cost of the energy improvements on
top of the approved mortgage. FHA EEMs provide
mortgage insurance for a person to purchase or
refinance a principal residence and incorporate
the cost of energy-efficient improvements into
the mortgage. The borrower does not have to
qualify for the additional money and does not
make a down payment on it. The mortgage loan is
funded by a lending institution, such as a
mortgage company, bank, or savings and loan
association, and the mortgage is insured by
HUD. FHA insures loans. FHA does not provide
loans.
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Section 203(k) insurance enables
homebuyers and homeowners to finance both, the
purchase (or refinancing) of a house and the
cost of its rehabilitation through a single
mortgage - or to finance the rehabilitation of
their existing home. FHA approved lending
institutions which include many banks, savings
and loan associations, and mortgage companies
can make loans covered by Section 203(k)
insurance.
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Reverse mortgages are becoming popular
in America. Reverse mortgages are a special
type of home loan that lets a home owner
convert the equity in his/her home into cash.
They can give older Americans greater financial
security to supplement social security, meet
unexpected medical expenses, make home
improvements, and more.
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FHA has permitted streamline refinances
on insured mortgages since the early 1980's.
The "streamline" refers only to the amount of
documentation and underwriting that needs to be
performed by the lender, and does not mean that
there are no costs involved in the transaction.
The basic requirements of a streamline
refinance are:
- The mortgage to be
refinanced must already be FHA insured
- The mortgage to be
refinanced should be current (not
delinquent).
- The refinance is to result
in a lowering of the borrower's monthly
principal and interest payments
- No cash may be taken out on
mortgages refinanced using the streamline
refinance process
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The more you know about our home loan
program, the more you will realize how little
"red tape" there really is in getting a VA
loan. These loans are often made without any
down payment at all, and frequently offer lower
interest rates than ordinarily available with
other kinds of loans. Aside from the veteran's
certificate of eligibility and the VA-assigned
appraisal, the application process is not much
different than any other type of mortgage loan.
And if the lender is approved for automatic
processing, as more and more lenders are now, a
buyer's loan can be processed and closed by the
lender without waiting for VA's approval of the
credit application.
Additionally, if the lender is approved under
VA's Lender Appraisal Processing Program
(LAPP), the lender may review the appraisal
completed by a VA-assigned appraiser and close
the loan on the basis of that review. The LAPP
process can further speed the time to loan
closing.
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These loans are made by a lender, such
as a mortgage company, savings and loan or
bank. VA's guaranty on the loan protects the
lender against loss if the payments are not
made, and is intended to encourage lenders to
offer veterans loans with more favorable terms.
The amount of guaranty on the loan depends on
the loan amount and whether the veteran used
some entitlement previously. With the current
maximum guaranty, a veteran who hasn't
previously used the benefit may be able to
obtain a VA loan up to $240,000 depending on
the borrower's income level and the appraised
value of the property. The local VA office can
provide more details on guaranty and
entitlement amounts.
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Veterans who served on active duty and
were discharged under conditions other than
dishonorable, during World War II and later
periods are eligible for VA loan benefits.
World War II (September 16, 1940 to July 25,
1947), Korean conflict (June 27, 1950 to
January 31, 1955), and Vietnam era (August 5,
1964 to May 7, 1975) veterans must have at
least 90 days' service. Veterans with service
only during peacetime periods and active duty
military personnel must have had more than 180
days' active service. Veterans of enlisted
service which began after September 7, 1980, or
officers with service beginning after October
16, 1981, must in most cases have served at
least 2 years. VA regional office personnel may
assist with additional eligibility
questions
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The application process for VA
financing is no different from any other type
of loan. In fact, the VA application form is
the same as that used for HUD/FHA and
conventional loans. The mortgage lender
verifies the applicant's income and assets, and
obtains a credit report to see that other
obligations are being paid on time. If all is
well and the appraised value of the property is
enough to cover the loan needed, the lender, in
most instances, can then close the loan under
VA's automatic procedure. Only about 10 percent
of VA loan applications have to be submitted to
a VA office for approval before closing.
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You may use VA-guaranteed financing:
- To buy a home.
- To buy a townhouse or condominium unit
in a project that has been approved by
VA.
- To build a home.
- To repair, alter, or improve a
home.
- To simultaneously purchase and improve
a home.
- To improve a home through installment
of a solar heating and/or cooling system or
other energy efficient
improvements.
- To refinance an existing home
loan.
- To refinance an existing VA loan to
reduce the interest rate and add energy
efficiency improvements.
- To buy a manufactured (mobile) home
and/or lot.
- To buy and improve a lot on which to
place a manufactured home which you already
own and occupy.
- To refinance a manufactured home loan
in order to acquire a lot.
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A basic funding fee of 2.0 percent must
be paid to VA by all but certain exempt
veterans. A down payment of 5 percent or more
will reduce the fee to 1.5 percent and a 10
percent down payment will reduce it to 1.25
percent.
A funding fee of 2.75 percent must be paid by
all eligible Reserve/National Guard
individuals. A down payment of 5 percent or
more will reduce the fee to 2.25 percent and a
10 percent down payment will reduce it to 2.0
percent.
The funding fee for loans to refinance an
existing VA home loan with a new VA home loan
to lower the existing interest rate is 0.5
percent.
Veterans who are using entitlement for a second
or subsequent time who do not make a down
payment of at least 5 percent are charged a
funding fee of 3 percent.
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Absolute Mortgage Resources can help you
with your Bossier City FHA and Bossier City VA
home loans. Bossier City FHA home loans can
help Bossier City borrowers obtain a Bossier
City mortgage more easily. Bossier City VA home
loans can help Bossier City Veterans secure
Bossier City home loans to purchase their dream
home. Contact Absolute Mortgage Resources for
help with your Bossier City FHA and VA home
loans.
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