Alternate Mortgage Financing

Currently there are many different types of financing other than conventional mortgages. Governmental-backed programs exist for borrowers in rural areas, people with low incomes, and people who work in certain professions. Congress enacted the National Housing Act of 1934 that created the Federal Housing Agency (FHA) a governmental insurance agency.

The FHA is not a lender and does not make any loans directly to borrowers. It only insures the loan to reduce the risk by the qualified lender. Since there is less risk, more investors are willing to make these types of loans.

Another type of financing is more risky but sometimes a good mortgage solution for those who can't easily qualify for a common type of mortgage. This is an owner financing option where the seller finances the buyer. Both borrowers and sellers should involve a real estate lawyer in these types of transactions because there is risk to both parties.