ParentingContrary to Popular Belief, You Can Afford to Buy a Home!

Contrary to Popular Belief, You Can Afford to Buy a Home!

Finding a home where you can start and raise a family can be daunting, especially as you see the high down payment and stringent credit requirements. However, three government-backed home loans meant to make buying a home more accessible for people who do not have the income to cover a 20% down payment on a house.

These three government-guaranteed loans come in the form of Federal Housing Administration (FHA) home loans, U.S. Department of Agriculture (USDA) home loans, and Veteran Affairs (VA) home loans. Also, because the United States Government guarantees these loans, individual qualified lenders have the freedom to be more lenient about their credit requirements.

FHA Home Loans

FHA Home Loans are perfect if you are a first-time borrower. These loans have some of the most lenient credit score requirements, with qualifying credit scores as low as 580. Some lenders are willing to go even lower than that, although a higher down payment will be a requirement for credit scores under 580.

Additional benefits from FHA loans include:

  • Low 3.5% payment requirement.
  • A Lower monthly cost.
  • Lower closing costs.

If you have had a rough financial past, you can still qualify for an FHA loan. People with Chapter 7 and Chapter 13 bankruptcies are eligible for an FHA loan. However, Chapter 7 bankruptcies must be two years removed, while Chapter 13 requires that you get a court approval notice as well as proof that you have made 12 payments on time.

The Government does not offer FHA loans; instead, the administrators are qualified lenders. Fed Home Loan Centers is one such lender. They have a team of government loan specialists, counselors, and Realtors® who would be happy to assist you in searching for your dream home.

USDA Home Loans

USDA home loans, and yes, this is the same USDA that inspects your vegetables, offers home loans. Meant for lower-income families who live in one of the many rural communities within the county. These loans are only for modest single-family homes meant to strengthen the local rural economies by attracting commerce into the area. Additionally, these loans also offer some great incentives, which include:

  • $0 down payments.
  • Low monthly mortgage insurance payments.
  • Competitive interest rates.

Eligibility requires that your income is either equal or less than the area’s low-income limit, which varies per county. However, you must still prove that you will be able to make your monthly mortgage payments.

VA Home Loans

VA Home Loans are for veterans, active-duty military, and surviving spouses of veterans who died as a result of their service. If you fit one of these eligibility requirements, this loan might be the best choice for you. Also, this type of loan allows service members to purchase a home with some of the best benefits, which include:

  • $0 down payments.
  • Zero prepayment options.
  • Low monthly costs.
  • No mortgage insurance premiums.

Prior to January 1, 2020, VA home loans were subject to loan limits, which depended on the location of the property that you wanted to purchase. However, after January 1, 2020, these loan limits were removed after the signing of the Bluewater Navy Act on June 25, 2019.

Lenders are still required to do their due diligence and make sure that you will be able to afford your monthly payments. As a result, some lenders have set up limits on how much applicants can borrow. However, government-imposed limitations do not restrict them. Instead, they have restrictions based on your income and your ability to make your monthly mortgage payments.

Currently, VA Home Loans Centers has a loan limit of about $5,000,000. However, borrowers who have several VA home loans are still required to abide by their county’s loan limit. Currently, the loan limit is $510,400, with certain variations that depend on the county’s median home value.


When choosing to become a homeowner, an applicant needs to conduct their research as to what mortgage loans are right for them. Knowing about government loans can make all the difference with some of the most lenient qualification requirements and benefits available. The fact that the United States Government guarantees these loans gives borrowers some peace of mind.

Phil Georgiades is the CLS for Fed Home Loan Centers, a brokerage specializing in first-time buyer home loans. He has been a real estate professional for 22 years. To learn more about programs available to you or apply for a home loan, click here.

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