There are two special mortgage programs most people know little or not very well.
The Energy Efficient Mortgage (EEM)
The Energy Efficient Mortgage (EEM) is a loan designed to help home buyers save future money on utility cost. Basically, the cost of adding energy-efficient features is figured into the cost of a home. Both the 203(b) and 203(k) can be joined with an EEM. Below are the guidelines for EEMs,
* The cost of improvements must be determined by an energy consultant or a home energy rating system. The cost must
be less than the anticipated saving from the improvements.
* One/two unit new or existing homes are eligible, Condos are not included in the plan.
* The improvement financed maybe 5% of the property value or $4,000, which ever is higher. The sum financed must fall within the FHA loan limit.
The second one is VA Home Loan
A VA guaranteed loan is made by private lenders such as saving and loans, mortgage companies, or banks to eligible veterans who are buying a home that will serve their main residence. Just as the FHA assures that lender that it will be paid if home owner defaults, So does VA loan.
While a VA loan allow the borrower to make a lower down payment, they also may come with more restrictions than a standard bank loan does. These restrictions change and are updated frequently, so check with VA before applying. Generally speaking, veterans can get into a home with lower investment, the interest are negotiable, there are no mortgage insurance premiums, and the loan has no prepay penalty.
A VA fee is required by law. The fee is currently 2% on no down payment loans. Fee do change, and it is recommended that an interested people check with his or her lender or he U.S. Department of Veterans Affairs for updates. The funding for second time users for the no down payment loan is 3%. If the home buyer choose to provide a down payment, the fee is decreased.
One should also know that being eligible for a VA loan doesn't guarantee a loan. Your credit history and income still must pass the lender's qualification.
