Purchasing a residential property is the biggest investment for many people in their lifetime. But mortgage programs are not as affordable for so many, as they are costly. However, there are a few ways to buy a home with a lower-than-average income with a variety of loans.
USDA Mortgages
The United States Department of Agriculture, also known as USDA runs a loan program that offers mortgages to low- to moderate-income households in rural areas. The program is also known as the Single-Family Housing Guaranteed Loan Program. Through this program, the government backs the particular lenders who are interested to lend money to the potential home buyers. In addition, this loan doesn’t require any money to put as a safety deposit. Meeting the credit card requirement, which is usually a 640-credit score is good enough to be eligible for the loan.
VA Mortgage
VA mortgages are for those who have served in the US Army. The Department of Veterans Affairs follows a similar rule as USDA to provide loans for the creditors. These loans are guaranteed by a government agency (in this case, the VA), which helps to offer better terms like low or no down payments, and low-interest rates. If someone is eligible for the loan, they can get various benefits from it. For example, lower interest rates, no required down payment, no mortgage insurance, and more lenient credit and DTI requirements.
FHA Loans
This is one of the most popular options among government-backed mortgages. These loans are guaranteed by the Federal Housing Administration. Which is a part of the U.S. Department of Housing and Urban Development (HUD). The interesting thing about the loan is that the requirement is more lenient to help the low-income borrower with previous poor credit history.