Government Loans

These flashcards cover key concepts related to government loans, particularly focusing on FHA and VA loan programs, including definitions of important terms and processes.

Federal Housing Administration (FHA)

A government agency established under the National Housing Act of 1934 to stimulate employment in the construction industry and stabilize the real estate mortgage market.

Mortgage Insurance Premium (MIP)

A fee charged by the FHA to cover losses in case of borrower default; it can be paid upfront or financed into the loan.

Direct Endorsement Program

A program allowing approved lenders to underwrite FHA loans without prior FHA review.

FHA-Insured Loan Program

A program designed to provide mortgage insurance, allowing lenders to offer loans to borrowers with less credit history or lower income.

Housing Ratio

A ratio indicating that a borrower's total monthly housing expenses should not exceed 31% of their gross monthly income.

Total Obligations Ratio

A ratio stating that a borrower's total monthly obligations should not exceed 43% of their gross monthly income.

Section 203(b)

FHA mortgage insurance for one-to-four family homes, aimed at first-time homebuyers and those with difficulty qualifying for conventional loans.

Streamline Refinance

A simplified refinancing process for FHA-insured mortgages that requires less documentation and lowers costs for borrowers.

Certificate of Reasonable Value (CRV)

A certificate issued by a VA appraiser indicating the property's value, required for VA loan eligibility.

VA Loan Guarantee Program

A program providing veterans with loan guarantees, allowing them to purchase homes with favorable terms without a down payment.