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When looking to buy or refinance a home, there are several specialized types of loans to consider. Since you may not qualify for every type of mortgage, it is important to calculate how much mortgage you can afford and investigate the options available for your specific situation. It’s a good idea to compare rates from several lenders, so you are sure you are getting the best possible deal. Here are some mortgage programs that are frequently used for purchasing or refinancing.

1. FHA Loans

Federal Housing Administration (FHA) loans are government insured. They typically allow homebuyers to secure a loan with a low down payment (as low as 3.5% of the home’s purchase price). FHA loans can be easier to qualify for but have certain requirements and loan limits depending on the state and county you are buying in. These mortgages are very popular, especially for first-time homebuyers.

2. VA Loans

The U.S. Department of Veterans Affairs guarantees VA loans. They are for veterans, current service members and certain surviving spouses. VA loans can allow those who qualify to get mortgages without down payments, and at competitive interest rates and potentially no private mortgage insurance, which can shave hundreds of dollars off their monthly mortgage bill.


The Home Affordable Refinance Program, or HARP, is intended to help people afford to stay in their homes. Even if you haven’t fallen behind on payments, this program can offer help to those who have seen their home’s value fall below what they owe. The eligibility process to participate in a HARP program includes proving you have a reasonable ability to pay your new mortgage if you go through with refinancing. To qualify, you must have a loan owned or guaranteed by Fannie Mae or Freddie Mac, have a good payment history in the past 12 months, be current on your mortgage at the time of refinancing, and have a loan-to-value ratio of 80% or more on your home. Your loan may be subject to fees or points quoted by the lender and will reflect the market rates at the time of your refinance.

4. EEM

The FHA’s Energy Efficient Mortgage program, or EEM, began its national presence in 1995 as a way of helping homeowners or homebuyers pay off their mortgages more quickly. EEMs recognize that lowered utility expenses allow you to pay a higher mortgage payment to cover the cost of the energy improvements on top of the approved mortgage. This program insures mortgage loans so you can purchase a home or refinance and incorporate the cost of energy-efficient improvements into the mortgage. Lending institutions like a mortgage company, bank, or savings and loan association will provide the loan and the borrower does not have to qualify for the additional money or pay a down payment on it.

When you are searching for the right mortgage for you, it’s a good idea to explore all options — not just conventional mortgages. And it’s important to make sure that no matter which loan program you want to use, your credit score is in good shape. A good credit score can save you tens of thousands of dollars over the life of your loan. You can check two of your credit scores for free every month on Credit.com.

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