The U.S. Department of Housing and Urban Development (HUD) offers new opportunities to families and individuals to reach the American dream. This help is focused toward vulnerable groups like low-income households, people with AIDS, people with disabilities and homeless women and men. HUD’s mortgage assistance programs play a leading role in providing housing aid to people who need it .
Home Mortgage Insurance
The Federal Housing Administration (FHA) is a part of HUD. It insures more than six million mortgages in the United States. The FHA insures lenders against loss to encourage them to spend their money in the mortgage market and unwind eligibility criteria, so lower income borrowers are able to apply for a mortgage.
Graduated Payment Mortgage
This system allows low-income borrowers who can’t afford standard mortgage obligations, but expect their earnings to increase in another 5 to ten decades. Under this application, premature payments are low–so low, that they don’t even cover the interest, what is known as negative amortization. The negative amortization is added into the loan balance and paid in after years when the payments increase.
Growing Equity Mortgage Insurance
This system allows homeowners increase their monthly payments gradually to reduce the term of the mortgage. This saves money on interest payments and raises home equity faster.
Approved Counseling Agencies
HUD sponsors approved housing counselor agencies around the nation. Homeowners, renters and those searching for a home or a rental can seek guidance from home counselors at no cost. These professionals have a deep understanding of the mortgage market and can assist homeowners to buy a home, refinance their mortgage and avoid foreclosure.
Good Neighbor Next Door
According to HUD, studies indicate that areas with law enforcement officers, educators, firefighters and other public service professionals are stronger and safer. The Good Neighbor Next Door program encourages such public servants to buy a home in revitalization areas at a 50 percent discount.