FHA and Veteran home loans

The GI Bill was signed into law by President Franklin D. Roosevelt which provided soldiers veteran home loans underwritten with certain government guarantees.  These guarantees by the government made the portfolios attractive for lending institutions. The main attraction on these VA Loans was that they carried no default risk to the lenders providing the loans.  Since the default risk was eliminated to the lenders premium interest could be offered to all qualified veterans. 

VA loans must be insured and with the insurance there are insurance premiums collected and added to the loan amount.  The amount of the premium primarily depends on how often you have used your eligibility or what type of transaction you are doing.  It can also change by the amount of money you decide to put down.  The most common premiums collected and added to your mortgage through the VA are as follows:

2.15% - for first time use of your VA benefits with no disability.

3.35% - for multiple use of your VA benefits with no disability.

0.00% - for any use of your VA benefits, if you have at least 10% disability through the VA.

.5% - on all refinances

VA is a popular choice and should be looked at if you qualify. It is currently the only true 100% loan package now available in the market.

FHA loans work very similarly to VA loans, but are offered to everyone else that qualifies under the loan program parameters. 

FHA Colorado Home Loans continue to be a great solution for Americans who are looking for another option in home loan financing.  These federally assisted mortgages are issued by qualified lenders, such as 1st Metropolitan Mortgage right here in Colorado.  FHA Colorado Home Loans opened the door for an entire nation in its greatest time of need.  During the Great Depression many homeowners were experiencing high levels of foreclosures and defaults which created major concern for lending institutions.  In order to prevent a complete shut down of conventional home loan lending, the U.S. established the Federal Housing Administration, which is often referred to as FHA.  FHA began to subsidize loans by offering guarantees to lending institutions in the event of default.  Overnight, FHA Colorado Home Loans became available to all Americans.  In order to ensure that the Federal Housing Administration did not experience any substantial losses, Mortgage Insurance companies were allowed to offer insurance in place of subsidized FHA loans.  The term FHA Colorado Home Loans continued through the years and is mandated by the Federal Housing Administration; however, its funding consists primarily of independent Mortgage Insurance companies.  Mortgage Insurance is often known as PMI in the mortgage lending world. 

The Federal Housing Administrations currently utilizes a hassle-free look at credit criteria. These credit qualifying processes are clear cut and applicable to most consumers.  It has also allowed for a more relaxed standard when looking at credit, and therefore qualifying more people.  With the current state of the mortgage industry being in such disarray, these programs have helped bring new life to mortgage lending.  Many of the high risk loans, known as subprime loans, were underwritten by lenders no longer in business.  When these loans, which carried adjustable rate features, became due a new type of loan was needed, which is when FHA came on the scene. 

History has once again repeated itself in the lending world.  FHA was established to bring a better solution to the home buying experiences and was viewed as a savior for the housing market in the late 1930’s. Today, once again it has become the biggest sought after bailout program the mortgage industry has ever seen.  This is why it is normally the first option offered to our clients.