Veterans are given many financing options when it comes to purchasing a home.
The VA Loan
Almost all lenders and other real estate professionals will recommend that VA loan to those who qualify, but it’s still important to understand how it differs from other mortgage products.
Keep in mind that a VA loan requires no down payment, no PMI, and often comes with lower interest rates as you compare.
USDA Loans
These loans also require no money down as a down payment but are restricted to certain locations and income limits of the buyer. They are backed by the United States Department of Agriculture.
USDA loans were designed to encourage home ownership in rural areas and for those with lower incomes. USDA loans may be available for suburban areas as well.
FHA Loans
FHA loans are insured by the Federal Housing Administration and may allow a down payment as low as 3.5% for eligible borrowers. Most FHA programs charge an upfront mortgage insurance premium and an annual premium collected monthly. Compare total costs and eligibility with other loan options. Read the official guidance.
FHA loans are popular for those looking to fix up an existing home that is need of repairs, but can be used for the purchase of any home if the buyer meets the eligibility requirements.
Conventional Mortgage
A 20% down payment is not required for every conventional mortgage. Some eligible buyers can qualify for options with as little as 3% down. Private mortgage insurance is usually required with less than 20% down; eligibility and costs depend on the selected program and borrower. Read the official guidance.