Circumstances make it difficult for some people to qualify for conventional mortgages. Government-insured loans exist for this reason – so borrowers who need funding can achieve their homeownership or financial goals.
Government home loans and other federally backed loans are often more affordable, have lower interest rates, and are often easier to qualify for than personal or conventional loans. We’ve created a short guide to everything you need to know about the most popular government loans available.
What Are Government Loans?
Government loans are insured or backed by the U.S. federal government. There are many types of government home loans as well as government loans for college education, disaster relief, opening a business, and supporting veterans. Government-backed mortgages help all types of home buyers purchase their dream homes.
Types of Government Loans
Government loans serve an array of purposes. Here are five common types.
Student loans: Several loan programs, including direct PLUS loans, Perkins Loans, and Stafford Loans, help students or their parents cover college tuition and related expenses.
Business loans: Several business loan programs, overseen primarily by the U.S. Small Business Administration (SBA), help businesspeople start or grow their enterprises, or recover from disasters. The most popular kind of SBA loan is known as a 7(a) loan.
Home loans: Numerous mortgage programs for homebuyers and homeowners fall into this category, including federally backed home loans, disaster loans, and home improvement loans. A popular type of federal housing loan is a mortgage from a lender approved by the Federal Housing Administration (FHA), otherwise known as an FHA loan.
Agriculture loans: This category includes loans that help farmers and ranchers run or expand their operations.
Veterans loans: The U.S. Department of Veterans Affairs (VA) offers several loan programs for military veterans who are homeowners or homebuyers.