What Types of Loan Programs Can Help Me Purchase?
Great question! There's several types of loans available, all with different pros and cons. Here's a breakdown of some of the most commonly used programs.
- FHA Loans are guaranteed by the Federal Housing Administration. They require only 3.5% down, which makes them a great option for homebuyers without much savings. They are also more flexible on their credit requirements. The downside is that these benefits come with both upfront and ongoing mortgage insurance (which protects the lender, not you) for the life of the loan.
- Conventional loans typically have more stringent credit requirements than the FHA loan and can also have down payments as low as 3% for the HomePossible and HomeReady products (FreddieMac and Fannie Mae) to 20% or more. Any loan below 20% will include Mortgage Insurance that can be cancelled once a certain loan to value ratio is reached or a certain amount of time has passed. Special programs like HomeReady and HomePossible can have geographic and income restrictions.
- The Oregon Bond loan is funded through mortgage revenue bonds. This allows Oregon Housing and Community Services to offer below market interest rates to income qualified households. These loans tend to have favorable interest rates and include an option for Cash Assistance.
All these products can pair well with other down payment assistance like the IDA or MAP loan. Talk with your lender about what program might be right for you and your unique situation!