Many dream of being a homeowner, and let’s face it, with the rising costs of rent, it just makes sense for some. When a conventional mortgage isn’t a good fit, there are other options, so here’s some more information about what’s out there and what 4Front can help you with.

FHA Loan

An FHA loan is a type of mortgage insured by the Federal Housing Administration. Geared towards first time homebuyers, this loan may let you make a down payment as low as 3.5% and can offer reduced closing costs. It also has less-restrictive credit requirements than many conventional home loans. A great option for homebuyers with little credit or down payment options, it should be noted that FHA loans typically require mortgage insurance, which can increase your monthly mortgage payments.

VA Loan

VA Loans are offered to active US Military or veterans. You must have a certificate of eligibility from the US Department of Veterans Affairs and meet certain criteria for your service. Once determined eligible, there is a VA backed home loan where the VA is your lender, or you can get a VA backed loan through a financial institution.

With a VA-backed home loan, the VA guarantees a portion of the loan. If a VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Because there is less risk for the lender, they’re more likely to give better terms on a loan. According to the VA, “nearly 90% of all VA-backed home loans are made without a down payment.” Lenders may also require you to meet additional standards before giving you a loan. These may include having a minimum credit score or getting an updated home appraisal.


A USDA loan provides low and moderate-income households the opportunity to own a home in eligible rural areas. The USDA states, “Eligible applicants may purchase, build, rehabilitate, improve or relocate a dwelling in an eligible rural area with 100% financing. The program provides a 90% loan note guarantee to approved lenders in order to reduce the risk of extending 100% loans to eligible rural homebuyers – so no money down for those who qualify!”

This loan is a great option for individuals and families with limited credit and income. More information can be obtained here:

Fannie Mae HomeReady and Freddie Mac Home Possible

The HomeReady and Home Possible are federal programs designed for low-to-moderate income borrowers with limited cash resources. Income is based on area median income while some areas have no limitations. The main benefit of this mortgage option is that you will not be penalized with a higher rate for a lower down payment, lower credit scores, or smaller loan amounts. With a standard Conventional home loan, the mortgage rate would increase based on those factors. Borrows in this program can have as little as 3% down with no requirements on previous homeownership. Another key point is that it allows the income from other household members to be included in calculations. This program does require borrowers to complete an approved Homebuyer Education course. 

Conventional Loans

A conventional mortgage is pretty straight forward. It is not guaranteed by any government entity and is offered through private lenders, like 4Front Credit Union. Interests rates can vary by lender and typically down payments less than 20% require PMI (mortgage insurance). This is a great option for homebuyers with good credit and the resources to provide a down payment. Because there is less risk for the lender, homeowners can save money over time with great interest rates and no PMI.

Buying your first home can be intimidating, but there are options for everyone. Learning about your credit and financial wellness is a great start before jumping in and looking for one of the home loans above. The above description of loans is not meant to replace the knowledge and information a mortgage loan officer can provide. 4Front offers assistance with the above mentioned options, so contact us today!