History

• FHA was established by Congress in 1934 to help increase home ownership among Americans during difficult economic times. A result of the Servicemen's Readjustment Act of 1944, the VA home loan guaranty program was established to serve the economic needs of millions of veterans of the World Wars, according to VA-Home-Loans.com.
  
  

Significance

• VA-guaranteed loans are one of the few financing options that require no down payment. According to Military Hub, VA loans increased 31 percent in 2008. FHA loans require a minimum down payment of 3.5 percent. FHA insures more than one-third of the nation's mortgages, making them the world's largest government insurer of mortgages in the world, according to HUD.
  
  

Function

• FHA and VA serve a variety of borrowers. VA's clientele is limited to those who have served in the U.S. Armed Forces and certain beneficiaries of disabled or deceased soldiers, including veterans, active duty personnel, reservists and National Guard members. FHA serves both military and non-military borrowers, most of which earn low- to moderate-incomes.
  
  

Identification

• FHA is an agency within the U.S. Department of Housing and Urban Development. HUD administers and oversees FHA's programs, while the Department of Veterans Affairs oversees the VA loan guaranty programs.
  
  

Features

• "The Department of Veterans Affairs' Loan Guaranty program does not impose a maximum amount that an eligible veteran may borrow using a VA guaranteed loan," according to the VA. The VA does, however, limit the amount they will guarantee, depending on the county. FHA limits the amount a homeowner can borrow using an FHA-insured loan, which varies by county and area. FHA and VA impose different caps.