1.FHA mortgage insurance protects the lender if a borrower defaults on the FHA loan. Each FHA borrower pays a mortgage insurance premium. The premiums are collected and used by the FHA to reimburse the lender (not the borrower) should the borrower default and the lender must foreclose upon the loan/sustain a loss. This insurance enables a lender to provide loan options and benefits often not available through conventional financing.
VA Loans: The VA guaranty helps to protect the lender (not the borrower) against loss if the borrower fails to repay the VA loan. Borrowers pay an up-front funding fee towards the VA guaranty. This guaranty enables a lender to provide loan options and benefits to military veterans and other qualified participants that may otherwise be unavailable through conventional financing. Maximum Loan amounts vary by county.
2.Government loans are not limited to first-time homebuyers.
3.Minimum credit scores apply. Not all applicants will qualify.
4.VA loans require a VA funding fee at closing. The fee is higher with a zero down payment. If a down payment of 5% or more is made, the fee is reduced. The VA funding fee is non-refundable.