What kinds of government approved mortgage loan programs are available for the lender today? There are actually more programs available today than any other time in recorded mortgage history; and the ability to qualify for these programs is an all-time high.
In this article were going to take a look at FHA, VA, Fannie Mae, Freddie Mac, the HECM, and the SNAP programs available thanks to government regulation of funding.
And FHA mortgage is the term used to describe a direct primary market lending product. What are FHA loans and how do you apply? Your options for application now are through an approved lender, or via the Internet.
FHA, or the Federal Housing Authority was established in 1934 as a part of Franklin D. Roosevelt's 'New Deal'. It was the president's plan to help the country get back on its feet at the end of the Great Depression. FHA loans with a way to provide the funds needed to construct low income housing and provide Americans with the dream of home ownership.
It worked, tremendously well and in 1965, the FHA became a part of the Department of Housing and Urban Development. In the decade since its inception, the FHA has become the largest insurer of home mortgages and has allowed more Americans to live the dream of home ownership at a rate that is in comparable to that of any other country.
The VA loan is simply a spin-off of the FHA loan open only to veterans having served in the Armed Forces. The VA loan was conceived in order to provide returning veterans with the opportunity to purchase homes and start their lives again.
Fannie Mae, or the Federal National Mortgage Association, was established to provide a secondary market for the FHA mortgage loans. In 1938, when President Roosevelt established the Federal National Mortgage Association it was intended to provide a secondary market for lenders to sell mortgages in order to originate new ones.
Freddie Mac, followed in a few years, and was implemented to serve a broader base of mortgages. Although Fannie Mae and Freddie Mac are not direct lenders, our current mortgage system would not be in operation nor would we have experienced the success with homeownership we enjoy today.
The home equity conversion mortgage or HECM is a HUD supervised program that works with FHA homeowners who are over the age of 62 to remain in their homes by allowing them to access their home's equity, sometimes referred to as the reverse mortgage.
The safe neighbourhood action plan or SNAP is an FHA supervised effort to improve urban communities. The problem focuses own illuminating drug abuse and cry him in urban areas by providing education, school activities, and assistance for project residents.
Now that we've covered all the government approved mortgage loan programs, let's take a look at the FHA mortgage options available. FHA offers adjustable rate mortgages, fixed rate mortgages, energy-efficient mortgages, graduated payment mortgages, mortgages for condominium units and growing equity mortgages.
The more commonly used mortgage products by the individual residential homeowner are the adjustable rate mortgage the fixed rate mortgage and the energy-efficient mortgages.
As we move closer to a more energy efficient energy conscious nation, I believe we will see an increase in the energy-efficient mortgages at a greater concern on the part of HUD that will make room for an increase in energy-efficient mortgages.
The graduated payment mortgage is an option for FHA homeowners who currently have low to moderate incomes but expected to increase substantially over the next few years; this can be compared to a balloon note or the adjustable rate mortgages in use today.
As you can see, the government has played a tremendous role in making possible the dream of homeownership in this country.
Yes, I believe we can say today more Americans live the dream of home ownership than any other nation in the world thanks in great part to the fact that President Roosevelt stepped in at the end of the Great Depression and provided a way to restore faith in the American way of life.