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1.3.2.10 Government Mortgage Guarantors

There are special government programs that provide mortgage insurance or guarantees to lenders who make mortgage loans to homebuyers who meet certain criteria. These programs are offered by the federal government (the Federal Housing Administration (FHA), which is part of the U.S. Department of Housing and Urban Development; the Rural Housing Service, which is part of the U.S. Department of Agriculture; and the Department of Veterans Affairs) or by a state housing finance agency. Under these programs, the insurance covers close to 100% of losses. In addition to insurance, these loans come with an obligation on the part of the insured lenders to work with homeowners to cure default.23

Footnotes

  • 23 {23} See Ch. 6, infra.