Government Loans

North Star Home Lending is both an FHA (Federal Housing Administration) and VA (Veterans Administration) approved lender. In effect, these federal agencies either insure or guaranteed these loans on behalf of the consumer. Government lending continues to grow into a large part of our current lending portfolio. Recent changes due to the government’s recent stimulus package continue to make these options more and more desirable.

In 1965, the Federal Housing Administration became part of the Department of Housing and Urban Development (HUD). Since 1934, the FHA and HUD have insured over 34 million home mortgages. Currently, the FHA has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio. Currently new budget numbers are projecting "windfall revenues" for FHA due to the collapse of the sub-prime market and a flood of new loans being originated.

FHA has increased its maximum mortgage in the tri-county area to $297,500. Add to that, more favorable underwriting standards with respect to credit and job history, and total cash investments as low as 3%, and the product has become highly desirable.

FHA loans have long been favored by some Realtors and borrowers as they tend to be less rigid with respect to borrowers qualifications and more forgiving than conforming conventional loans.

Be sure to ask us about the FHA streamline refinance program, 203K rehabilitation loans as well as the new FHA secure home loan program.

The original Servicemen's Readjustment Act, passed by the United States Congress in 1944, extended a wide variety of benefits to eligible veterans including the loan guarantee program of the Veterans Administration. Under the law, as amended, the Veterans Administration is authorized to guarantee or insure home, farm, and business loans made to veterans by lending institutions.

VA loans are guaranteed by the U.S. Department of Veterans Affairs. These loans may only be issued by qualified lenders such as North Star Home Lending.

The VA loan was designed to offer long-term financing to American veterans or their surviving spouses (provided they do not remarry). The basic intention of the VA direct home loan program is to supply home financing to eligible veterans.

The VA loan allows veterans up to 100% financing without private mortgage insurance for the purchase of a new home. As of January 1, 2006, the maximum VA loan amount with no down payment is $417,000 and can be as high as $625,500 in certain high cost areas. VA also allows the seller to pay all of the veteran's closing cost as long as the cost do not exceed 4% of the sales price of the home.

There are many unique characteristics to both FHA and VA loans. North Star Home Lending loan officers have undergone extensive training to both understand and confidently explain to our clients all of the specific requirements that each program entails. Not every lender is approved to offer government loans and not every lender, even though they may have both FHA and VA approval, are adept at properly explaining the necessary requirements.

If you feel you may be a good candidate for an FHA or VA loan, feel free to contact a North Star Home Lending loan officer today.

For further information, please contact your North Star Home Lending professional.