FHA (Federal Housing Administration)
The Federal Housing Administration (FHA) administers various mortgage loan programs. FHA loans have lower down payment requirements and are easier to qualify than conventional loans. There are statutory limits set for FHA loans. To get more information about FHA loans, visit their website: http://www.fha.com.
VA (Veterans Administration)
The VA does not actually loan money. VA loans made by lenders are guaranteed by U.S. Department of Veterans Affairs. This guaranty allows veterans and service persons to get home loans with favorable loan terms, usually without a down payment. It is easier to qualify for a VA loan than a Conventional Loan. The VA determines your eligibility. If you qualify, the VA will issue you a certificate of eligibility to be submitted with your VA loan application. For more information, visit the VA Loan website: http://www.valoans.com.
CHFA (Colorado Housing and Financing Authority)
This is Colorado’s low-income housing program. To get more information and to find a CHFA lender, please visit their website: http://www.chafainfo.com.
Any loan that is not FHA, VA or CHFA is considered conventional. They have stricter qualifications and higher down payment requirements. There are 2 types of conventional loans, conforming and non-conforming. A conforming loan means that the terms, conditions and qualification requirements follow the guidelines set by Fannie Mae and Freddie Mac. Both Fannie and Freddie purchase mortgage loans from lending institutions that comply with their guidelines. These loans are packaged into securities and sold to investors. To learn more about Freddie and Fannie, see their websites: http://www.fanniemae.com & http://www.freddiemac.com. A nonconforming loan is one that does not conform to Fannie/Freddie guidelines and will be kept by the lender. Usually called a portfolio lender.