Are you planning on making a big purchase soon? Is it hard for you to get the money together? Well, that’s not necessarily a problem anymore. There are lending opportunities from the federal government that can help finance your next big dream. If you want to know more about these loans, then you can always read this article for guidance! We can tell you about some of the most popular federal loans that finance different needs.
Lending Options From The Federal Government
When looking to purchase you may find it hard to find funding. Not every bank will approve you and you may not have enough saved up. Well depending on your area of needed help, you may find an assistance option right for you and your family. Consider the options below.
- Single Family Housing Repair Loans and Grants
- Single Family Guaranteed Loan Program
- VA Home Loans
- FHA Home Loans
- Direct Unsubsidized Loans and Direct Subsidized Loans
Single Family Housing Repair Loans and Grants
This loan program from the United States Department of Agriculture (USDA) offers qualifying families a lending amount up to $50,000 from loans and grants. These loans, with a 1% fixed interest rate, help those that want to fix or upgrade their homes! Through this program, the loan could reach $40,000 and the grant could reach up to $10,000, which adds up to a total of $50,000. The best part of this program is that recipients do not need to pay off the $10,000 grant!
Single Family Guaranteed Loan Program
If you are looking for a program that does not have requirements on down payment and credit, then this USDA loan program might be the one for you! This program reduces financial risk that lenders normally face by guaranteeing the loan. Furthermore, this program helps lenders to disburse loans to borrowers that are in a certain income bracket. These loans help both borrowers and lenders at the same time!
VA Home Loans
Of the federal loan options you’ll find that VA Home Loans differ in quite a few ways. Requirements for the VA Loan can sometimes vary depending on the lender. You’ll also find that VA loans are handled by private lenders and are guaranteed by the Department of Veterans Affairs or VA for short. Keep in mind only eligible spouses, veterans, and active service members are able to use this loan type. Within these loans you can expect to see some similarities regardless of the private lender, due to the specific guidelines needed to follow. The guidelines for these loans are determined by VA themselves and are as followed:
- No down payment requirement
- No private mortgage insurance (PMI) requirement
- Easier eligibility criteria
- Competitive interest rates
FHA Home Loans
For those who cannot get a loan because of their not-so-great credit, that is where the Federal Housing Administration (FHA) loan might come in handy. This is when the FHA insures these mortgages so that approved lenders can provide them. Having a credit score of 580 or more could lead to a down payment requirement of 3.5%. For those that have a credit score between 500 to 579, the requirement for a down payment would be 10%. Some of the terms for these loans feature more flexibility in qualifying, including lower requirements for credit, along with reduced down payments than a normal mortgage. Even though these requirements may not be ideal, they are still better than the requirements for a standard mortgage.
Direct Unsubsidized and Subsidized Loans
When looking to further your education you may stumble into a rough spot. This could be due to lack of funds, fees, and just hassles in general. The United States Department of Education works to help students seeking a higher education when it comes to money troubles, afterall school can get expensive. Of the ways to aid, you’ll find two separate loan types:
- Direct Subsidized Loans
- Direct Unsubsidized loans
While both are similar by form of application (FASFA) their key differences come into play when looking at student qualifications and amount given.
For Direct Subsidized Loans, only an undergraduate that has shown a need for financial aid, can receive this option. On the other hand, for Direct Unsubsidized Loans, a professional, undergraduate, or graduate student can benefit.
For Subsidized loans the amount a student receives depends on their situation. Because of this, not every student receiving this aid will receive the same amount. It’s also important to note that the ED will only handle interest on a Direct Subsidized Loan if the student is at least half-time in school, during a period of deferment, or throughout a grace period (which is the first 6 months after the student no longer is a student at the school). As for an Direct Unsubsidized Loan, amounts still may differ for each student, but a maximum of $20,500, is available to a recipient each year
When looking to start a new journey in life, one might find it difficult to take that first step. Reasons might include a number of things but do not let money be one. Of the several assistance opportunities out there, we discussed options that can help with big purchases such as dealing with a house or handling school costs. This would include housing options like a VA Housing Loan and FHA Housing Loan or educational options like Direct Unsubsidized Loans and Direct Subsidized Loans. You want to remember each form of aid has its own eligibility requirements regardless of them all being federal aid. Another thing to keep in mind would be that these are not your only options. While yes the loans listed here can be more accessible depending on your situation, you still might not qualify. So keep your eye out for other opportunities when plan A fails. A good website to use would be the 211.org as they provide a wealth of general information that could suit anyone’s needs.