A government mortgage loan is offered by governments who subsidize or provide assistance to low income or disadvantages home purchasers. Government mortgage loans are provided at the state and federal level and the qualification criteria and range of programs offered depends on the country or authority that establishes the program. For the most part, whether you can afford to purchase a home depends on your credit rating, monthly expenses, down payment commitment and the prevailing interest rates. These programs can lessen the burden of home ownership by assisting with down payment, financing or by helping with closing costs.
The US Department of housing has an extensive range of low income mortgage loans. The (FHA) which forms part of HUD has been assisting homeowners since 1934. An example of this is the program that allows you to secure a down payment for as little as 3% of the purchase price with all inclusive costs and fees. Another type of available loan allows you to buy a home, fix or repair it, and include the total costs under one loan. Existing home owners can remodel, refinance and consolidate the costs of repair all under the one loan. If you're an elderly citizen over the age over 62 the FHA allows you to convert a potion of you home equity into cash.
HUD's Good Neighbor Next Door Sales Program allows community law enforcement officers, pre-kindergarten through to 12th grade teachers, firefighters and emergency medical technicians to contribute to community revitalization by offering a 50% discount off the list price of a home. The individual is required to commit to the residence for a period of 36 months in return. The available properties are listed in the program and remain available for purchase for a period of 5 days. A similar type of program is available in 50 US states to support victims of hurricane Katrina, Rita or Wilma. During the period of offering, these HUD homes can be purchased at 10% discount off the market price and HUD will pay up to 5% of the purchasers closing costs in connection with the sale.
Additional Government Mortgage Loan Programs offered by HUD include:
1. Homeownership for Public Housing Residents - A program which allows renters to convert to a mortgage payment.
2. Indian Housing Loan Guarantee Program - offers new home ownership property rehabilitation and new construction opportunities for eligible tribes.
The HUD website also provides links to other state government mortgage loan programs that are available to qualifying residents.
Keystart in Western Australia is an example another government backed program, owned by the Department of Housing and Works that has been established to assist West Australians to move into affordable housing. It is not limited to first home buyers but subject's applicants to a range of qualifying criteria.
Potential and existing home owners are advised to check the state and federal government websites in the respective country of residence for further information about the type of government mortgage loans on offer.