For those wanting to buy a home, finding lending can be tough. These days, private lenders are very tight with their purse-strings and are reluctant to lend at rates even remotely approaching pre-2006 levels. This can easily leave you in a bind as you try to find some way to purchase a home, be it a traditional home or a foreclosure.

Fortunately, the federal government has several avenues that you can take to obtain a loan from a private lender. Note that the federal government is not in the business of issuing primary loans. It does, however, guarantee loans issued by private lenders, which basically helps to make it far easier for you to obtain a private loan if you qualify for the federal program.

Types of Government Home Loans Available

There is a myriad of government home loans available to you, both at the state and federal level. State programs vary, so here we will discuss the federal options that you may qualify for when purchasing a new home.

Basic Federal Housing Administration (FHA) Insured Home Mortgage

This mortgage loan, sponsored by the Department of Housing and Urban Development (HUD), helps families purchase a single home for residency. You can apply through FHA-certified lenders, which involves almost all major lenders and most community lenders. First-time homebuyers can obtain an FHA loan with a down payment as low as 3.5% and receive up to 6% toward closing costs for the home loan.

Department of Veterans Affairs Mortgage Loan (VA Loan)

The VA loan is offered to eligible veterans and spouses and allows these individuals to purchase a home up to a certain limit with 0% down and a small funding fee of 0 to 3.15% of the loan amount. This means that qualified veterans could potentially buy a home without paying a down payment or closing costs.

U.S. Department of Agriculture Section 502 Loan

A Section 502 loan is a direct loan for low-income individuals buy homes in rural areas in the U.S. (as defined by the USDA). Applicants generally need to have no greater than 80% of the area median income (AMI) for the county in which they live. Those who have up to 115% of the AMI can qualify for a guaranteed home loan that is created with a private lender.

Indian Home Loan Guarantee

For those individuals who are of American Indian or Alaska Native descent, HUD offers a Section 184 home mortgage loan for those residing on or off of tribally designated housing entities, tribes, villages, and other lands.

Incentives for Pursuing Government Loans

One of the main incentives for obtaining a government home loan for your mortgage is the prospect of actually being able to buy a home, versus being declined by a private lender for a variety of reasons. Many people are ineligible without these home loan guarantees because they do not make enough money, or can’t put down a large down payment, or have poor credit or other negative circumstances. Since lending is tight, private lenders need some kind of reassurance that can only be provided by the government in most cases.

Another incentive is the prospect of obtaining a home loan with a very low or non-existent down payment. Typically, lenders like to see 10-20% of the loan amount paid down at the beginning, with 20% quickly becoming the norm as it once was. Not many people have 20% of a home loan saved up. With an FHA loan, for example, you can buy a home with just 3.5% down. A VA loan could potentially give you a 0% down payment.

Additionally, you can use government home loans to purchase a variety of homes that otherwise you would not be able to buy, including foreclosed properties. The allure of these properties – steep price discounts and widespread availability – means that they are affordable. But, private lenders do not always want you to buy a home foreclosure. Getting government guarantee for a loan could enable you to go to a foreclosure listing service, like ForeclosureDeals.com, and find a cheap home for sale.

Finally, you can use government funds to rehabilitate a fixer upper home, or even to rebuild a home that has been destroyed by a natural disaster. Did you know, for example, that the Section 203(k) program administered by HUD will give you money to not only buy a home, but to also rehabilitate it? It’s true – and that is something useful for homebuyers and investors alike.

Qualifying for These Government Loans

Qualifying for a federal loan involves more paperwork than a conventional, private home loan, but the benefits are worth it. You will need to provide, at a minimum:

- Proof of income for you and your co-signers, typically in gross monthly income format

- Addresses for your past and present places of residence (last two years)

- Social Security numbers

- Names and locations of your past employers (last two years)

- Financial info for your current checking and savings loans

- Financial info for any assets you have (stocks, bonds, real estate, etc.)

- Approximate value of your personal property

- Check stubs and W-2 forms (last two years)

- Info for any other current loans or debts

For VA loans, applicants will need to provide two things:

- Certificate of Eligibility (obtained from the Department of Veterans Affairs from their website)

- DD-214 (the official discharge paperwork from the military)

For additional requirements, you will need to talk to the appropriate loan official or representative for the specific loan you desire.

Quick Steps to Obtaining Government Loans

If you want to try for a government home loan to purchase a property, you are in luck. The federal government has made the process easier over the last few years as a way to give people an incentive to buy homes.

One of the best ways to get a great start is to assemble your paperwork completely and thoroughly. Take time to collect a total package, like the one outlined above. Then, do your research on the loan itself. What are the requirements? What are the loan limits? How much is a down payment? What specific things could disqualify you?

Next, make sure you contact the right lender. Not every lender is qualified to originate an FHA loan, for example. Use an online search to find an FHA-certified home loan originator. It further increases your chances if the lender manually underwrites its own loans, as opposed to having them automatically underwritten. That means the lender has a bit more discretion (or “wiggle room”) in who qualifies, and can work with you to get a loan accomplished.

Also, consider multiple lenders and shop around. Even if they are offering the same type of government loan, they could still offer various incentives that differ.

Finally, take some time to repair and boost your credit score if it is low. Those with scores below 500 do not qualify for FHA loans, and you really should have at least a 580 score. The higher, the better. Those who have at least a 620 score stand a much better chance of obtaining a government home loan than those with sub-par scores. Talk to a credit counselor. Pay off past debts, consolidate debt, and take on a second job if needed to boost your income. Sometimes, waiting a few months to boost your score is a great idea.

Government home loans are out there for the taking. With this guide, you hopefully will be one step closer to obtaining one and buying a home of your own.

This is one of the most frequently-asked questions involving real estate that prospective homebuyers ask, especially in today’s environment of tight lending standards. Banks use a variety of factors to determine one’s eligibility for a loan, some of which are proprietary and not readily available. The general process, however, is similar across the industry.

Knowing the process and what factors are involved can help you when pursuing a loan for your next home purchase.

Credit, Credit, Credit

Credit is the first word most people utter when discussing mortgage loans and obtaining approval from the bank.

One’s credit score is not the be-all, end-all in terms of getting loan approval, of course – there are other factors in play – but by and large, your credit score plays a massive role in the process.

What factors play into your overall credit score, and which are of particular interest to banks when they sift through your financial record? They typically look at:

• Your overall available credit and the percentage of your available credit that you are currently using (called your credit utilization ratio, or debt-to-credit ratio). Today, if you are above 50%, you are in risky territory as far as a lender is concerned.
• The length of your credit history. If you have only had a few credit sources open for a few months, you will be penalized a lot more than if you have a couple of sources that have been in good standing for years.
• What types of credit you use. Do you just use credit cards and retail credit cards? Or, have you taken out vehicle loans and have a line of credit with another lender or entity? Bank credit cards are superior to retail credit cards, as are any other secured type of credit.
• Payment history. Have you been late on your payments? If so, expect a significant penalty – payment history is 35% of your score, according to most.

What is considered a minimum credit score and a “good” credit score for getting a mortgage loan approved? As far as the Federal Housing Administration is concerned, 580 is the minimum – and is by no means “good”. Good for most lenders is above 620. The best rates are given to people who have scores higher than 770, but anything over 700 is pretty good in this day and age.

What You Bring to the Table

There are other factors to consider, of course, and these are more heavily scrutinized than they have ever been. Formerly, you could obtain a mortgage loan with a good credit score and a signature. Now, you need to show proof of income – a big, big deal these days – and even some collateral or a significant down payment to secure approval.

First, proof of income. Banks need to know that you have the financial means to pay off the loan. It’s a big purchase, after all – and a big risk. You need to verify that you have a good annual income – for many lenders, that is at least 40% of the mortgage. Plus, you also need to show that this income is stable. Even high-income earners with unstable job security (like those who work multiple jobs) are being turned down by some lenders. Be prepared to show federal and state tax records, pay stubs, and other supporting materials.

Collateral and down payments are additional factors that you can bring to the table for consideration. Do you have any other non-cash, liquid or illiquid assets that can be used as collateral to help secure the loan? The more the merrier – and if you can make a good-sized down payment of 20% or more, you will improve your chance. Gone are the days in which any lender will sign off on a loan with 0% down, except in uncommon cases with certain types of loans (like a VA loan). A 20% down payment is again the norm.

All of these factors play into the decision-making process banks use to determine who is qualified for a loan and who isn’t. While some of it may seem unfair and unduly complicated or unnecessary, keep patient; getting qualified and owning a home is worth the effort.

If you keep up with real estate and the current issues surrounding major banks throughout the country, then you are familiar with our country’s issues with banks. Now, however, these issues seem to be expanding and affecting more than just the United States.

The Federal Housing Finance Agency (FHFA) has started a lawsuit against 17 banks. The reason for the lawsuit? Misrepresentation.

Apparently these banks are being accused of misrepresenting some of the mortgages they sold to Fannie Mae and Freddie Mac, totaling close to $200 billion. The specific amount FHFA desires to obtain has yet to be determined and will be announced as the legal procedures get underway.

With the United States already providing $150 billion (of taxpayer money) to assist Fannie Mae and Freddie Mac, they are clearly seeking to obtain some of that money back to cut the losses.

Of the 17 banks being accused of misrepresentation, not all of the banks are merely willing to sit aside and take the hit. Instead, the Royal Bank of Scotland is preparing for battle and is ready to take on the U.S. allegations.

Unfortunately, the announcement of these banks facing a lawsuit has led to declining shares for European and U.K. banks associated with the dilemma.

In the end, the U.S. continues to suffer from the effects of actions and inactions by major banks across the world. This battle specifically is geared at obtaining as much money as possible of the near $200 billion of mortgages sold to Fannie Mae and Freddie Mac—mortgages that led to significant losses when the housing crisis occurred.

All eyes are on this case to determine if FHFA will be successful in their attempt to receive some money back for these bad mortgages.

The number of Tacoma foreclosed homes is some of the highest in the whole country, with the city and the rest of Pierce County recording the highest rate of foreclosure for 2010 in the whole state. Along with Snohomish County, Pierce posted the most significant foreclosure numbers, with one household out of every 45 under some stage of foreclosure last year.

The ratio of foreclosure homes in Washington against non-foreclosed properties in some markets of the region is similar to the national rate, although it is still below areas like Nevada, Arizona, and Florida, which are traditionally known as the hotbeds of foreclosures in the whole country. However, numbers in the state, particularly in Snohomish and Pierce, have jumped considerably in the past year.

For the whole 2010, the area of Seattle-Tacoma-Bellevue ranked second nationwide in terms of percentage increase in foreclosure-related activities. The number of filings, foreclosed FHA homes for sale and distressed properties rose in the metropolitan area by 23% in 2010 compared with 2009 levels. Only Houston-Sugar Land-Baytown's foreclosure rate rose higher than the Tacoma area last year.

Lack of investors who buy foreclosure homes was part of the reason cited for the high foreclosure rates in these areas, but analysts stated that most of all, it is the unemployment level that is hurting the housing market. In Washington, the unemployment rate as of December 2010 was 9.3%, representing a 0.1% rise from the previous month and edging closer to the national unemployment level of 9.4%.

The state's legislature is reportedly considering a number of programs designed to control the rush of foreclosed banks and FHA homes for sale into the market, including a legislative bill that will require a dialog between lenders and borrowers before any foreclosure action is taken. For 2011, analysts mostly agree that the same housing market situation will prevail.

Find more foreclosure listings in Tacoma, WA:

• Tacoma Cheap Houses

According to reports, some foreclosures in Pompano Beach and in some other areas of Florida are conduced by financial institutions who own the tax liens of property owners who have found themselves unable to pay for their property taxes. The process starts with financial institutions collecting homeowners' tax debts which give them the opportunity to add fees and interests to these debts.

The debts are then bundled as securities that can be sold to investors. With the additional interests and other charges leveled on these debts, it becomes even more difficult for homeowners to pay them. When the unpaid taxes reach a point where homeowners are unable to pay them, the entity that purchased the tax lien can then take over the properties and they become Florida foreclosed properties for sale.

According to housing experts, this new type of dealings add further to the burden faced by homeowners who are already suffering from the large supplies of bank and FHA foreclosures for sale in the market. Reports from Florida stated that hedge funds and banks are able to bid for these tax liens mostly in online auctions conducted by county and city tax collectors.

Institutions involved in selling these tax debts are reportedly able to get an investment return of as high as 10%. For the part of the lien buyers, they can get their investments back by seizing the properties which end up as foreclosed homes. Another advantage that the buyers of tax liens can enjoy is anonymity.

According to analysts, the bonds are privately sold so no public records are made of who purchased the bonds and how much return they can expect from the purchase. The practice is reportedly beneficial to tax lien sellers and buyers, as well as local governments. However, some have criticized the process as another method that causes homeowners to lose their properties to bank and FHA foreclosures for sale.

Find more foreclosure listings in Pompano Beach, FL:

• Pompano Beach Cheap Houses

The announcement came as the September 2010 housing market data were published, showing that some counties in the state continue to suffer from high number of foreclosures, including Baltimore foreclosure homes. Counties like Anne Arundel, Pasadena, Annapolis and Glen Burnie also recorded high foreclosure statistics for the month.

For the period January to September 2010, foreclosure homes in Maryland reached a total of 17,940. The number included filings for notices of default, repossessed properties and notices of auction. Over 1,000 of these filings can be found in Anne Arundel.

Numbers for the month of September alone find foreclosure homes concentrated in the areas of Pasadena, Glen Burnie and Annapolis. There were 122 accumulated filings for the three areas for the month, with Annapolis accounting for 41 of these filings. The three locations also recorded the highest housing sale concentrations for every month of the January-September period.

With the number of foreclosed government, bank and FHA houses for sale continuing to record high totals in several areas of Maryland, the state's Attorney General Doug Gansler has found it imperative to join the investigation on the practices of mortgage firms to find out whether their procedures are sound and legal. Gansler has reportedly stated that mortgage companies should start examining their foreclosure procedures and own up to any failing in their processes.

Meanwhile, the Maryland Court of Appeals' Standing Committee on Rules of Practice and Procedure has weighed in on the issue by recommending that courts in the state implement an emergency rule that will require companies that used faulty affidavits to defend the validity of their documents in the courts under a perjury penalty.

With the state's participation in the countrywide investigation and the recent data on bank foreclosures and FHA houses for sale showing rising numbers in certain areas of the state, analysts have stated that it will take some time before the region's housing market settles down and move towards a recovery.

Find more foreclosure listings in Baltimore, MD:

• Bank Owned Homes in Baltimore

The FHA and HUD websites are the best place to start. Visit the HUD website to find information on HUD and FHA-approved foreclosed homes counseling centers in your area. You can call to set up an appointment and go over your options. One of the best ways an FHA foreclosure counselor can help is to inform you of your options. Too often homeowners facing foreclosure choose to do nothing when they receive notices of default, hoping that the problem will resolves itself. This is never the case, and taking action to fix your problem by contacting you lender is often the best course to take, as soon as you possibly can. An foreclosure counselor can teach you how to do this, and how to go about negotiating for alternatives to foreclosure.

Counselors can also help you apply for FHA loans that will allow you to modify and refinance your mortgage. One of the biggest causes of foreclosure homes these days is homeowners who have mortgages they cannot afford. Refinancing allows you to lock in a lower interest rate and lower your monthly payments, meaning you can better stay on top of your loan.

Getting in touch with an FHA pre foreclosure approval counselor is a great option for anyone facing foreclosure. HUD isn't the only place to find them as well. You can contact the Hope Now Foundation, or the Neighborworks organization, both of which are funded by the federal government to help you get the help you need.

In case you're looking for foreclosed homes for sale at low prices or information on how to buy foreclosures, you can explore our website here to learn more about discounts and bank owned homes. Buying foreclosures is the key to real estate market recovery and can get you a great price on a new home, so look into it today!

Just like Irvine foreclosure auctions, the valley's house auctions rose by a little over 13% during the period in focus despite declining loan default rates. According to analysts, this could be a sign that foreclosure activity is leveling off and is starting to slow down. However, foreclosures' later stages, like auctions, are still rising so recovery is still not apparent.

Overall activities related to foreclosures, including California house auctions, loan defaults and bank owned structures, declined in Coachella during the January-June 2010 period at a total of 10,562 compared with the same period of 2009 when total foreclosure activities were at 12,007. Along with the slowdown in activity, foreclosed property inventory also diminished, particularly for the $500,000 or lower price range.

Meanwhile, local realtors have reported that bank foreclosures, FHA properties for sale and other foreclosed dwellings in the price range of below $350,000 are being unloaded rapidly by sellers. Although homes priced over $500,000 take some time, there is still marked interest, albeit not as much as in cheaper ranges.

Real estate market analysts have reported that most properties in lists of foreclosed houses got sold faster during the first six months of the year partly because banks have simplified the process of short sales, making the option more attractive to both sellers and buyers. Meanwhile, auctions have also gained the attention of property buyers in the area.

The increased interest in auctions and bank REO owned dwellings have encouraged most realtors as they claim that the foreclosure cycle might be nearing its end. They estimate that the area has at least two years worth of foreclosed property inventory and that despite dropping numbers of notices of defaults, the number of foreclosed residences and FHA properties for sale in the Valley will remain some of the highest in the whole U.S. for the rest of 2010.

Find more foreclosed homes in Irvine, CA

For buyers of Ontario foreclosed homes for sale, the PACE program might be a point of interest as it offers loans to residential and commercial property owners to be used in retrofitting their homes and premises with green technologies like solar panels. Borrowers can pay back the low interest loans through a home tax assessment leveled on the property that will remain in place even when the house has been sold.

The announcement of the FHFA is expected to impact programs similar to PACE and the housing market itself as the agency regulates mortgage firms Fannie Mae and Freddie Mac, which both have thousands of foreclosures all around the U.S., including foreclosed homes in California.

Some of those who have purchased FHA foreclosure homes for sale and who have shown interest in the PACE loan program have to wait for the FHFA and the administration to come up with agreeable terms for the retrofit loans. The agency has explained that it is not against such loans in general, but has objected specifically to the PACE loan project because, according to them, its structure is similar to property taxes.

People buying foreclosed houses for sale would be better off knowing the process of such loans. The FHFA has explained that under PACE provisions, if a property is foreclosed, the PACE loans should be paid first by the borrower as the payment will be given to the mortgage lender.

The agency has added that the program presents risks to secondary markets and lenders and may change mortgage-backed securities valuations. The agency also reveals that those who have mortgages backed by the FHFA must get lender permission before they can get PACE loans or something similar to it.

Buyers of FHA foreclosure homes for sale and other types of foreclosed dwellings who might be interested in the PACE loan were advised to study the pros and cons of the program before considering getting such loans.

The rules are expected to impact all housing markets, including Florida. This could also have a significant bearing on Pompano Beach foreclosure investing, with homebuyers and investors expected to take note of these new rules before they go about purchasing residential properties in the area.

The FHA has been known to be lenient when it comes to delinquent insurance and tax payments, particularly to senior borrowers. However, the budgetary problem being faced by the agency allegedly forced it to reconsider its guidelines. The FHA is reportedly facing a budget shortfall estimated to be worth almost $800 million.

The shortfall is the first loss that the agency has recorded and is partly attributed to the declining prices of houses, particularly in hard-hit states like Florida. The decline in home prices has produced a big number of cheap houses in Florida, a development that the residential real estate industry is trying to come to terms with.

In conjunction with the planned changes in FHA home foreclosures guidelines, mortgage firm Fannie Mae has also instructed the firms that service its FHA reverse mortgages portfolio to be more vigilant and to implement tougher policies on insurance and tax delinquencies. The mortgage lender has reportedly instructed these companies to initiate foreclosure on borrowers who fail to pay their taxes and insurance premiums beyond the extension periods provided to them.

As the lists of foreclosure properties continue to expand in Florida and in the rest of the U.S., government agencies like the FHA and government-sponsored firms like Fannie Mae are left with no choice but to take additional steps to address the housing problem. According to real estate analysts, the tougher rules will put more homeowners at risk, including senior homeowners.

Analysts have also added that the expected changes in FHA home foreclosures rules will mean more homeowners who own reverse mortgages will be facing risks of foreclosures, particularly those who have lost their jobs and do not have the means to pay insurance premiums and taxes on time.

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