Secrets to Getting a Government-Backed Loan

Brandy and Tom Donahue, who always pay bills on time, didn't qualify under today's strict guidelines for a government-backed VA or FHA loan because of credit mistakes that were more than 10 years old. Even though the Veterans Administration doesn't require a specific credit score, banks now have set stricter rules.

When they tried to get a government-backed loan last year, all the Donahues could find was a higher-cost, adjustable rate mortgage. "We were told we needed a 690 credit score when we didn't realize a credit score was required," Brandy Donahue said.

Tom, a police officer and veteran, and Brandy, a teacher, were told by their mortgage broker that after making 12 on-time payments they could streamline the loan into a lower fixed-rate mortgage. After the year was up, their broker had more excuses as to why they didn't qualify for a government-backed loan, so the Donahues started shopping for a new broker.