Loan Guarantee Program (Section 502)
Under the Guaranteed Loan program, the Housing and Community Facilities Programs guarantees loans are made by private sector lenders and guaranteed by the federal government. The individual works with the private lender and makes his or her payments to that lender.
Under the terms of the program, an individual or family may borrow up to 100% of the appraised value of the home, which eliminates the need for a down payment. Since a common barrier to owning a home for many low-income people is the lack of funds to make a down payment, the availability of the loan guarantees from HCFP makes the reality of owning a home available to a much larger percentage of Americans.
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