Loan programs available

First-time home buyers may be able to take advantage of various loan programs aside from a conventional mortgage from a bank.

First-time home buyers may not be aware of the loan programs that exist aside from the conventional mortgage from a bank.

Conventional mortgages that are uninsured by the federal government typically require 3 percent down payment and a minimum credit score of 600. However, property condition requirements are also less than those for government loans.

There are advantages and disadvantages with all loan types, and it’s important to find the right one for each specific homeowner’s circumstances. Here’s a list of other loan program options offered through federal government programs. 

FHA Loans

A Federal Housing Administration (FHA) loan is a mortgage that is insured by the FHA. Borrowers have a comparably favorable down payment requirement of 3.5 percent and a minimum credit score of 600.

Additionally, seller concession rate maxes out at 6 percent and the down payment can be fully gifted by a family member.

What really sets apart FHA loans is the highest total debt ratio of all the loan programs discussed here when qualifying.

One of the advantages of FHA loans is that borrowers pay for mortgage insurance, which protects the lender from a loss if the borrower defaults on the loan, which allows lenders to offer FHA loans at favorable interest rates and with flexible qualification requirements, from credit scores to employment.

VA Loans

Loan programs through the Veterans Administration (VA) offer some of the most favorable deals available to service members, veterans, and eligible surviving spouses.

VA loans have 0 percent down payment and a minimum credit score requirement of 600.

Those who take out a VA loan also enjoy the cheapest mortgage payments thanks to low interest rates and no private mortgage insurance (PMI).

USDA Loans

Similar to loans through the Veterans Administration, with broader qualification standards beyond buyers of veteran status, loans from the U.S. Department of Agriculture (USDA) are available only in selected, rural areas of Oswego County. According to Syracuse Securities loan officer Carol Wink, the parameters of eligibility are “huge.”

USDA loans require 0 percent down payment, a 600 minimum credit score and up to 6 percent seller concessions.

This is where Oswego County homebuyers have a significant advantage over Onondaga County homebuyers: low taxes.

“The beauty of Oswego is you’re getting a lot more home for the money, the taxes, and the real estate property bylaws,” Wink said.

To see if you are eligible for a USDA loan, visit eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do.

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