KNOWLEDGE BASE

What are common home loan (mortgage) programs?

Below are some common home loans. For additional information, view our Home Loans page at: https://www.usbank.com/home-loans.html

Government-backed loans 
The government subsidizes these loans to protect lenders against defaults on payments. This makes it a lot easier for lenders to offer customers lower interest rates. 

  • Housing Administration (FHA)
  • Veterans Affairs (VA)
  • U.S. Department of Agriculture Rural Development (USDA)

Conventional mortgages
The federal government does not insure or guarantee these types of loans. The guidelines for conventional, or conforming, mortgages are set by two organizations (below). In addition to selecting a mortgage program, the borrower will choose among fixed-rate and adjustable loan programs offered by the lender.

  • Federal National Mortgage Associations (FNMA) a.k.a. Fannie Mae
  • Federal Home Loan Mortgage Corporation (FHLMC) a.k.a. Freddie Mac

The purpose of these organizations are:

  • To allow lenders to reinvest their assets into more lending by expanding the secondary mortgage market
  • To increase the number of lenders in the mortgage market

In addition to selecting a mortgage program, the customer will choose among fixed-rate and adjustable loan programs offered by the lender.

  • Adjustable: The interest rate can change at intervals spelled out in the mortgage contract and can make the monthly payment increase or decrease
  • Fixed-rate: The interest rate and basic loan payment are the same for the life of the loan