There is a new loan out there that is now replacing the once popular sub prime mortgage loan. Community Reinvestment Act or CRA loan is what has a lot of banks competing over. CRA loans have the advantage of giving consumers a low interest rate, even as low as 5.57 percent for a 30 year fixed. These loans are only possible for consumers that will pay points up front.

Most of the consumers that qualify for these loans have a credit score of 600, the majority of them coming for a low-income area. Consumers in other areas can also qualify for these loans as well. To qualify for a CRA loan your income must be 80 percent or less of the median for your county, but does not have to do with the location of your home.If your income is above average for a CRA loan but the home is in a low-income area you can still qualify for a CRA loan.

There is also another loan that is being brought back. FHA loans came into existence during the Great Depression when the foreclosure epidemic put hundreds of thousands of people onto the streets. These loans are offered by private lenders but insured by the government. Their market share fell from 18 percent of all home loans in 1990 to less than 4 percent by 2006, according to the National Association of Home Builders. One reason is that the application process for an FHA loan is more tedious and requires more paperwork than that of sub prime loans touted during the housing boom.

Today there is a new push toward FHA loans, Assistant Secretary for Housing, Brian Montgomery, said before a congressional committee in favor of changing the process for the benefit of "troubled sub prime consumers."

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Source: www.articledashboard.com