A government-backed loan is a

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that ...

subsidized by the government, also known as a Federal Direct Loan, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates. Its primary aim is to make home ownership affordable to lower income households and

first-time buyer A first-time buyer (FTB) is a term used in the British, Irish, Canada property markets, and in other countries, for a potential house buyer who has not previously owned a property. A first-time buyer is usually desirable to a seller as they do no ...

s. There are numerous types of government-backed loans, which vary dependent on the country and status of the borrower. Arguably, the most widely known type of government-backed loan is the US

Federal Housing Administration The Federal Housing Administration (FHA), also known as the Office of Housing within the Department of Housing and Urban Development (HUD), is a United States government agency founded by President Franklin Delano Roosevelt, created in part by ...

FHA loan An FHA insured loan is a US Federal Housing Administration mortgage insurance backed mortgage loan that is provided by an FHA-approved lender. FHA mortgage insurance protects lenders against losses. They have historically allowed lower-income Ame ...

, in existence since 1934. Other types of government-backed loans include the following: * American Dream Downpayment Initiative - ADDI * Good Neighbor Next Door *

HOPE VI HOPE VI is a program of the United States Department of Housing and Urban Development. It is intended to revitalize the worst public housing projects in the United States into mixed-income developments. Its philosophy is largely based on New Urban ...

* Teacher Next Door Program *

VA loan A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA). The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving s ...

State of New York Mortgage Agency The State of New York Mortgage Agency (SONYMA) is a New York State public-benefit corporation created in 1970 by the state government of New York to provide affordable homeownership to low- and moderate-income New Yorkers. It offers affordably pri ...

– SONYMA

External links

Office of Housing
Loans Government finances {{US-gov-stub

See also

External links