A government-backed loan is a loan subsidized by the government, also known in the United States 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 buyers.
United States 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 FHA loan, in existence since 1934.
Other types of government-backed loans include the following: American Dream Downpayment Initiative - ADDI Good Neighbor Next Door HOPE VI Teacher Next Door Program VA loan State of New York Mortgage Agency – SONYMA
See also FHA insured loan
External links Office of Housing