The main government mortgage programs today are FHA (Federal Housing Administration), VA (Veterans Administration) and Rural Development, the most commonly used program is FHA, primarily because it is not a credit score driven program and the mortgage applicant can have previously bad credit and collections, etc. Each of these programs offers something different and are designed as low or zero down programs.

FHA Designed specifically for the person with no credit score or has had many problems in the past with payments and collections and has a credit score that is below normal guidelines (less than 620). This program is probably one of the best for a new homeowner, and has an interest rate comparable to a regular loan.

¤ Allows very challenged credit history or no history.
¤ No 2 months of reserves required (2 x house payment).
¤ 97% or 100% with down payment assistance program.
¤ Collections/judgements must be paid, but medical collections do not.
¤ Financial gitfs are allowed for the 3% down payment.
¤ Finance in closing cost and escrows to 6%.
¤ Loan limit (single family), most counties $172,632, SE Mich $226,100.

VA The Veterans Administration, loan program makes it easier for the current or past member of the US military forces to buy a home. Credit guidelines are also liberal, in that past problems are OK, but they want to see a current history of relatively clean payment history. If the buyer has no previous credit history, they allow alternate forms of payment history (rent, utilites, etc)., The goal with VA is they want everyone to qualify for their home loan, and will make reasonable exceptions.

¤ Zero down and closing costs and escrows up to 6% can be financed in.
¤ No 2 months of reserves required (2 x house payment).
¤ Liberal credit guidelines.
¤ No monthly mortgage insurance required.
¤ Large loan limit of $359,650 for single family homes.
¤ Minor collections do not have to be paid off, only judgements.
¤ Must be out of Chapter 7 bankruptcy 2 years with restablished credit.
¤ No 2 months of reserves required (2 x house payment).

Rural Development This is a government program from USDA, for out lying areas. In Michigan, generally south of M46, most counties, it is the outlying area of these counties that qualify, For areas north of M46, generally any home in all counties qualifies. Maps are available, from me. The program is for 30 year fixed, with 100% financing, depending upon appraised value, closing costs and escrows can be financed in.

¤ Up to 100% financing based on appraised value.
¤ No monthly mortgage insurance required.
¤ Little or no credit history required.
¤ If credit history, should be good, preferred above 660.
¤ Properties - new or existing stick built, modulars and condos.
¤ Not restricted to first time homebuyers.