Loans are financial instruments that allow people to buy and fulfill their needs and wants appropriately. A loan is given by the lender to a borrower on a condition that the borrower would repay the loan amount in the given time. The loan amount includes the principal and interest amount which the borrower has to pay in the monthly scheduled payments. People mostly require loans to purchase a house as they cost quite a lot. The home loans programs are offered by banks and private lenders but come with strict guidelines and requirements such as good credit scores and low debt to income ratio.
People who have ignored home loans due to poor credit scores or do not have considerable cash savings look to acquire government-backed loans which have easy and simple loan terms when compared with ordinary loans. Government loan programs in Texas include wide options which potential homebuyers can obtain such as:
- Federal Housing Administration (FHA) loans which are best when it comes to getting a loan even with a poor or bad credit score. The homebuyers have to make 3.5% or 10% down payment which is less than 20% down payment of standard home loans.
- Veterans Affair (VA) loans are special loans offered to war veterans and their families. These loans offer wide financial advantages and veterans do not have any pay any amount as down payment or mortgage insurance. The interest rates are also low.
- United States Department of Agriculture (USDA) loans allow homebuyer to own a house in a rural area and farmland with easy loan terms such as low-interest These loans also do not require any down payment and mortgage payments are fixed.
Apart from the most popular loans mentioned above, there are also other government loan programs in Texas such as:
- The rural housing loan program that provides an opportunity to buy low-income affordable houses in farmlands and agricultural area
- Home renovation and improvement loans are given to remodel and upgrade the looks of the house.