ABA Family Legal Guide

Buying and Selling a Home

Financing a Home Purchase

Different Types of Loans

How do FHA and VA loans work?

The Federal Housing Administration (FHA) and the Veterans Administration (VA) are loan guarantors. They offer loans made by the federal government or approved lending institutions. The fees associated with these loans vary and may paid at the closing, or monthly over a period of time. While FHA loans are not available through all lenders, in some areas they are very popular and can make the difference in obtaining a loan for some potential buyers who do not qualify for conventional financing. The VA offers government-insured loans to qualified veterans, often with no money down.

Income qualifications, required down payments, and the maximum allowable loans under these plans change periodically. For first-time homebuyers, local and state governments may also offer loan assistance to prospective buyers who meet eligibility requirements. For current information about these loan programs, consult local FHA and VA offices and your bank as well as your real estate agent.