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Loan programs available to those who qualify by military service.

:: Certificate of Eligibility
A veteran who doesn't have a certificate can obtain one easily by completing VA Form 26-1880.

1. Apply for a Certificate of Eligibility.
   A veteran who doesn't have a certificate can obtain one easily by completing VA Form 26-1880, Request for a Certificate of Eligibility for VA Home Loan Benefits and submitting it to one of the Eligibility Centers with copies of your most recent discharge or separation papers covering active military duty since September 16, 1940, which show active duty dates and type of discharge.
2. Decide on a home to buy and sign a purchase agreement
3. Order an appraisal from VA. (Usually this is done by the lender.)
   Most VA regional offices offer a "speed up" telephone appraisal system. Call the local VA office for details.
4. Apply for a VA loan.
   While the appraisal is being done, the lender (mortgage company, savings and loan, bank, etc.) can be gathering credit and income information. If the lender is authorized by VA to do automatic processing, upon receipt of the VA or LAPP appraised value determination, the loan can be approved and closed without waiting for VA's review of the credit application. For loans that must first be approved by VA, the lender will send the application to the local VA office, which will notify the lender of its decision.
5. Close the loan and move in.

A program for homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining. The program allows homeowners to borrow against the equity in their homes in a lump sum, on a monthly basis for a fixed term or for as long as they live in the home, or on an occasional basis as a line of credit.

Homeowners 62 and older who have paid off their mortgages or have only small mortgage balances remaining are eligible to participate in HUD's reverse mortgage program. The program allows homeowners to borrow against the equity in their homes.

Homeowners can receive payments in a lump sum, on a monthly basis (for a fixed term or for as long as they live in the home), or on an occasional basis as a line of credit. Homeowners whose circumstances change can restructure their payment options.

Unlike ordinary home equity loans, a HUD reverse mortgage does not require repayment as long as the borrower lives in the home. Mortgage companies recover their principal, plus interest, when the home is sold. The remaining value of the home goes to the homeowner or to his or her survivors. If the sales proceeds are insufficient to pay the amount owed, HUD will pay the company the amount of the shortfall. The Federal Housing Administration, which is part of HUD, collects an insurance premium from all borrowers to provide this coverage.

The size of reverse mortgage loans is determined by the borrower's age, the interest rate, and the home's value. The older a borrower, the larger the percentage of the home's value that can be borrowed.

For example, based on a loan at an interest rate of 9 percent, a 65-year-old could borrow up to 26 percent of the home's value, a 75-year-old could borrow up to 39 percent of the home's value, and an 85-year-old could borrow up to 56 percent of the home's value.

There are no asset or income limitations on borrowers receiving HUD's reverse mortgages.

There are also no limits on the value of homes qualifying for a HUD reverse mortgage. However, the amount that may be borrowed is capped by the maximum FHA mortgage limit for the area, which varies from $81,548 to $160,950, depending on local housing costs. As a result, owners of higher priced homes can't borrow any more than owners of homes valued at the FHA limit.

HUD's reverse mortgage program collects funds from insurance premiums charged to borrowers. Senior citizens are charged 2 percent of the home's value as an up front payment plus one half percent on the loan balance each year. These amounts are usually paid by the mortgage company and charged to the borrower's principal balance.

FHA's reverse mortgage insurance makes HUD's program less expensive to borrowers than the smaller reverse mortgage programs run by private companies without FHA insurance.

A program that provides mortgage insurance for the purchase or refinance of a principal residence that incorporates the cost of energy efficient improvements into the loan.

FHA’s energy efficient mortgage program provides mortgage insurance for a person to purchase or refinance a principal residence and incorporate the cost of energy efficient improvements into the mortgage. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.

Eligibility requirements:

• Borrowers are eligible for approximately 97% financing. Borrowers are able to finance closing costs and the up front mortgage insurance premium into the mortgage. Borrowers are also responsible for paying an annual premium.
• Eligible properties are one to two existing units and new construction.
• The cost of the energy efficient improvements that may be eligible for financing into the mortgage is the greater of 5% percent of the property's value (not to exceed $8,000) or $4,000.
• To be eligible for inclusion in the mortgage, the energy efficient improvements must be cost effective, meaning that the total cost of the improvements is less than the total present value of the energy saved over the useful life of the energy improvement.
• The cost of the energy improvements and estimate of the energy savings must be determined by a home energy rating system (HERS) or energy consultant. Up to $200 of the cost of the energy inspection report may be included in the mortgage.

A single family adjustable rate mortgage that provide mortgage insurance for a person to purchase or refinance a principal residence at a lower initial interest rate.

FHA’s single family ARM program provides mortgage insurance for a person to purchase or refinance a principal residence at a lower initial interest rate. The mortgage loan is funded by a lending institution, such as a mortgage company, bank, savings and loan association and the mortgage is insured by HUD.

Eligibility requirements:

• Borrower must meet standard FHA credit qualifications.
• Borrower is eligible for approximately 97% financing. Borrower is able to finance closing costs and the uppermost mortgage insurance premium into the mortgage. The borrower will also be responsible for paying an annual premium.
• ARMS can only be used in conjunction with Sections 203(b), 234(c), and 203(k).
• The index used to determine the interest rate is the U.S. Treasury Security adjusted to a constant maturity of one year.
• Eligible properties are one to four unit structures.

A program that makes it easier for consumers to obtain affordable home improvement loans by insuring loans made by private lenders to improve properties that meet certain requirements.

The Federal Housing Administration (FHA) makes it easier for consumers to obtain affordable home improvement loans by insuring loans made by private lenders to improve properties that meet certain requirements. This is one of HUD's most frequently used loan insurance products. By the end of fiscal year (FY) 1996, it had insured almost 35 million loans totaling $43.6 billion.

The Title I program insures loans to finance the light or moderate rehabilitation of properties, as well as the construction of non residential buildings on the property. This program may be used to insure such loans for up to 20 years on either single or multi family properties. The maximum loan amount is $25,000 for improving a single family home or for improving or building a non residential structure.

For improving a multi family structure, the maximum loan amount is $12,000 per family unit, not to exceed a total of $60,000 for the structure. These are fixed rate loans, for which lenders charge interest at market rates. The interest rates are not subsidized by HUD, although some communities participate in local housing rehabilitation programs that provide reduced rate property improvement loans through Title I lenders.

Only lenders approved by HUD specifically for this program can make loans covered by Title I insurance. While most lenders and contractors use this program responsibly, HUD urges consumers to use caution in choosing and supervising home repair contractors conducting Title I repair/renovation work. A recent HUD review of Title I uncovered many instances of "unscrupulous contractors performing shoddy work, falsifying documents, overcharging homeowners, and using deceptive advertising." HUD encourages homeowners to work directly with their lender in selecting a home repair contractor in order to prevent inflated estimates.

A single family home rehabilitation program that enables you to finance both the purchase or refinance of a house and/or the cost of its rehabilitation through a single mortgage.

Section 203(k) insurance enables home buyers and homeowners to finance both the purchase (or refinancing) of a house and the cost of its rehabilitation through a single mortgage or to finance the rehabilitation of their existing home.

Section 203(k) is one of many FHA programs that insure mortgage loans, and thus encourage mortgage companies to make mortgage credit available to borrowers who would not otherwise qualify for conventional loans on affordable terms (such as first time home buyers) and to residents of disadvantaged neighborhoods (where mortgages may be hard to get).

Section 203(k) fills a unique and important need for home buyers in another way as well. When buying a house that is need of repair or modernization, home buyers usually have to follow a complicated and costly process, first obtaining financing to purchase the property, then getting additional financing for the rehabilitation work, and finally finding a permanent mortgage after rehabilitation is completed to pay off the interim loans. The interim acquisition and improvement loans often have relatively high interest rates and short repayment terms.

However, Section 203(k) offers a solution that helps both borrowers and mortgage companies, insuring a single, long term, fixed or adjustable rate loan that covers both the acquisition and rehabilitation of a property. Section 203(k) insured loans save borrowers time and money, and also protect mortgage companies by allowing them to have the loan insured even before the condition and value of the property may offer adequate security. Insurance commitments for 17,000 homes were made in 1996; the estimated number of homes to be insured under Section 203(k) for 1997 is 19,000, and 15,000 for 1998. For housing rehabilitation activities that do not also require buying or refinancing the property, borrowers may also consider HUD's Title I Home Improvement Loan program.

The extent of the rehabilitation covered by Section 203(k) insurance may range from relatively minor (though exceeding $5000 in cost) to virtual reconstruction: a home that has been demolished or will be razed as part of rehabilitation is eligible, for example, provided that the existing foundation system remains in place. Section 203(k)-insured loans can finance the rehabilitation of the residential portion of a property that also has non residential uses; they can also cover the conversion of a property of any size to a one to four unit structure. The types of improvements that borrowers may make using Section 203(k) financing include:

• Structural alterations and reconstruction.
• Modernization and improvements to the home's function.
• Elimination of health and safety hazards.
• Changes that improve appearance and eliminate obsolescence.
• Reconditioning or replacing plumbing; installing a well and/or septic system.
• Adding or replacing roofing, gutters, and downspouts.
• Adding or replacing floors and/or floor treatments.
• Major landscape work and site improvements.
• Enhancing accessibility for a disabled person.
• Making energy conservation improvements.

A program that reduces the amount of documentation and underwriting that needs to be performed by the mortgage company.

FHA has permitted streamline refinances on insured mortgages since the early 1980's. The word “streamline” refers only to the amount of documentation and underwriting that needs to be performed by the mortgage company, and does not mean that there are no costs involved in the transaction.

The basic requirements of a streamline refinance are:

• The mortgage to be refinanced must already be FHA insured.
• The mortgage to be refinanced should be current (not delinquent).
• The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
• No cash may be taken out on mortgages refinanced using the streamline refinance process.

Companies may offer streamline refinances in several ways. Some companies offer "no cost" refinances (actually, no out of pocket expenses to the borrower) by charging a higher rate of interest on the new loan than if the borrower financed or paid the closing costs in cash. From this premium, the company pays any closing costs that are incurred on the transaction.

Companies may offer streamline refinances and include the closing costs into the new mortgage amount. This can only be done if there is sufficient equity in the property, as determined by an appraisal. Streamline refinances can also be done without appraisals, but the new loan amount cannot exceed what is currently owed, i.e., closing costs may not be added to the new mortgage with those costs either paid in cash or through the premium rate as described above. Investment properties (properties in which the borrower does not reside in as his or her principal residence) may only be refinanced without an appraisal and, thus, closing costs may not be included in the new mortgage amount.