The FHA Home Loan is an Affordable Loan Facility for Low Income Earners

Key to the New HouseThe single biggest purchase of any person or family is usually their home. This is a long-term investment where the homeowner pays the mortgage monthly for up to 30 years. The home is not just big, but in monetary terms as well.

According to experts at PRMI St. George, one of the easiest loans to apply for is the FHA Home Loan. This facility provides a simple and affordable mortgage with flexible terms. This is usually recommended for those with a low credit score, and the conditions of the loan reflect that.


The FHA Home Loan is meant to be an easy way for people to buy their first home. The borrower can avail of the loan if he has a credit score of 500 or higher. Downpayment is 3.5% for those with a credit score of 580 and above, while those who have credit scores between 500 and 579 require a downpayment of 10%.

Loan term is either 15 or 30 years. The mortgage insurance has an upfront premium of 1.75% of the loan amount and an annual premium between 0.45% and 1.05% of the loan amount. The annual premium is paid in monthly installments as part of the mortgage payment. The loan has a fixed interest rate.


The FHA Home Loan is not funded by the FHA. Instead, it is lent by a lending institution and insured with the FHA. Part of the mortgage payments is loan insurance premiums. If the borrower defaults on the loan, the FHA will cover the payments.

The terms of the loan allow lower to moderate income earners, and those with a low credit score to be able to buy a principal residence. Repeat buyers can avail of FHA loans, as long as these are used to buy a principal residence.

The FHA Home Loan was first established during the Great Depression in the 1930s, to help low-income earners buy their own home. The terms of the loan make it very accessible for low to moderate income earners to avail.

Why You Should Take Advantage of the VA Home Loan

Woman holding a small dollhouse Veterans Affairs or VA loans are housing loans offered to eligible VA members, veterans, and surviving spouses. According to, this type of loan is more lenient on the application requirements. This allows for a simpler process and faster loan release.

Lending Facility

The U.S. Department of Veterans Affairs guarantees VA loans as part of the veterans’ benefits. It helps qualified members to finance the sale, building, repair, or retention of their home. The borrower does not have to put up a down payment, and mortgage insurance is also not required for VA loans.

The loans can cover up to 100% of the cost of the home. It can be more than the property’s reasonable value due to funding fees, which can be up to 3.3%. The largest loan amount with no down payment depends on the location and is usually up to $453,100. This may go as high as $721,050 in areas specified as “high-cost counties.”

For the Veterans

The history of the VA loan starts at the end of World War II, which allowed veterans to borrow money for homes and farms. Since its start, the VA has insured more than 20 million loans. In 1970, the coverage was expanded with the removal of termination dates for applying for housing loans. The same year saw the introduction of an amendment allowing for the guarantee of mobile homes.

The Veterans Housing Benefits Improvement Act of 1978 added more benefits. In 1992, the program was available only to those who had served on active duty during specific years or periods. Reservists and members of the National Guard who have served honorably for more than six years were also given this benefit.

The VA loan is a big help to veterans, active service members, and qualified spouses. They can take out affordable home loans to buy their own home, or improve their existing home at affordable rates even without a down payment.