Government Approved Mortgage Loans? Hey, have you every heard about any of these loans today? In mortgage history, there are record numbers of programs available today than any other time; and it is an all time high to qualify for these programs.
We are going to discuss the following Government Approved Mortgage Loans in the following sections.
- FHA
- VA
- Fannie Mae
- Freddie Mac
- HECM
- SNAP
FHA Mortgage
In order to describe a direct market lending product, FHA mortgage is the term used. What is the background of FHA loans and what is the process of applying for that loans?
By means of two ways viz., approved lender, or the Internet, your options for application are cleared. As a part of Franklin D. Roosevelt's "New Deal", FHA or the Federal Housing Authority was established in 1934. It was the president's plan to help the country get back on its feet at the end of the Great Depression.
By means of FHA loans, one can provide the funds needed to construct low income housing and it provides Americans with the dream of home ownership. It worked, impressively well and in 1965, the FHA became a part of the Department of Housing and Urban Development.
The FHA has become the largest insurer of home mortgages in the decade since its inception, and has allowed more Americans to live the dream of home ownership at a rate that is analogous to that of any other country.
VA Loan
Open only to veterans having served in the Armed Forces, the VA loan is simply a follow-up of the FHA loan. In order to make available returning veterans with the opportunity to purchase homes and start their lives again the VA loan was conceived.
Fannie Mae
In order to provide a secondary market for the FHA mortgage loans, Fannie Mae, or the Federal National Mortgage Association, was established.
It was intended to provide a secondary market for lenders to sell mortgages in order to originate new ones in 1938, when President Roosevelt established the Federal National Mortgage Association.
Freddie Mac
To serve a broader base of mortgages, Freddie Mac, followed in a few years, and was implemented. Although Fannie Mae and Freddie Mac are not direct lenders, our current mortgage system would not be operational nor would we have experienced the success with homeownership we enjoy today.
Home Equity Conversion Mortgage (HECM)
Sometimes referred to as the reverse mortgage 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.
Safe Neighborhood Action Plan (SNAP)
In an effort to improve urban communities, the safe neighborhood action plan or SNAP was introduced with the supervised effort of FHA. By providing education, school activities, and assistance for project residents, the problem focuses own illuminating drug abuse and cry him in urban areas.
In the above paragraphs, almost all the government approved mortgage loan programs are covered.
Now, 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 adjustable rate mortgage, fixed rate mortgage and the energy-efficient mortgages are the more commonly used mortgage products by the individual residential homeowner.
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.
For FHA homeowners who currently have low to moderate incomes the graduated payment mortgage is an option but expected to increase substantially over the next few years; today, this can be compared to a balloon note or the adjustable rate mortgages in use.
As you can see, the government has played a wonderful role in making possible the dream of homeownership in this country.
Yes, I believe we can say that 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 latterly of the Great Depression and provided a way to restore faith in the American way of life.
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