Whether or not to pursue higher education or purchase a home are two of the most expensive decisions someone can face. It can be hard to find the finances to make such dreams happen. As unfortunate as that sounds, it does not necessarily have to apply to you. Many lending options come from the federal government. Every loan offers financing for different needs, so you can find the loan that best suits yours. You might find it easier to qualify for federal loans and they come with better loan terms too! For higher education, you could consider federal education grants. The following article will provide you with some information on what options are available to you.
Federal Loans That Can Help
The first step to getting a federal loan is figuring out why you need one. As we mentioned above, there are many loans out there that could help with different problems you are currently struggling with. However, applying for just any loan (or all available loans) will be a waste of time for both you and the agency that issues the loan, because you may not need or qualify for all of them! That’s why it’s important for you to narrow down your options to find out what would be best for you and your family. To get you started, we’re going to tell you about different loan programs that are federally funded, such as:
- Single Family Guaranteed Loan Program
- Single Family Housing Repair Loans and Grants
- VA Housing Loans
- FHA Housing Loans
- Direct Subsidized Loans
- Direct Unsubsidized Loans
Single Family Guaranteed Loan Program (Section 502 Program)
This loan offers lenders the chance to expand their loans to families with certain income levels. The best part of this loan program is that there are no credit or down payment requirements that borrowers need to meet! The United States Department of Agriculture (USDA) offers this loan program, which provides a guarantee on the loans and reduces the financial risk that lenders generally face.
Single Family Housing Repair Loans and Grants (Section 504 Program)
You can thank the USDA for offering this loan too! The Section 504 Home Repair Program issues both loans and grants to those that qualify. If you want this loan, then you should want to fix, renovate, or improve your home. This program offers loans up to $40,000 and grants worth up to $10,000 for qualifying individuals. You can make significant improvements to your home with this amount of financing. Plus, the loan comes with a 1% fixed interest rate, and there’s no need to repay the grant!
VA Housing Loans
The United States Department of Veteran Affairs (VA) is responsible for guaranteeing a portion of these loans, while private lenders are in charge of issuing them. The VA sets guidelines for these loans, but a private lender could ask you to meet different requirements to qualify for the loan. Based on the loan-term guidelines that the VA set, these housing loans offer the following benefits:
- No requirement for a down payment
- Easy conditions to qualify
- No requirement for private mortgage insurance (PMI)
- Competitive interest rates
Since this kind of loan comes from the VA, those that can qualify and benefit from this loan are:
- Active members that are serving
- Eligible partners
FHA Housing Loans
The Federal Housing Administration or FHA offers a type of loan that is pretty unique in regards to the others. You will find that it differs in quite a few ways, one being that they offer more flexibility when it comes to credit eligibility. You can expect to see a down payment (DP) requirement based upon these credit scores:
- Credit scores of 500 – 579 have a DP of 10%
- Credit scores of 580 and above have a DP of 3.5%
It’s also important to note that these down payments are generally lower than what a lot of people come across. This federal loan opportunity is also offered by approved lenders and insured by FHA.
Direct Subsidized Loans
If you want to get a higher education degree, then these educational loans are a great opportunity for you. This loan comes from the United States Department of Education (ED). However, your school’s financial aid office can give you specific details about the loan and how it can help you, which is why you should reach out to them. Generally, if you want to apply for this lending opportunity, then the first thing you need to do is fill out a Free Application for Federal Student Aid (FAFSA). However, only undergraduate students who show they are financially struggling can qualify, and not every student gets the same amount. The loan amount depends on the student’s current situation and their financial needs.
There are interest rates that come with these kinds of loans. However, the ED covers the interest rate when a student has at least part-time attendance or goes through the deferment period. Additionally, the ED deals with the interest rate during the grace period.
Direct Unsubsidized Loans
This type of educational loan offers a maximum annual amount of $20,500 for certain students and also focuses on your current situation. Similar to direct subsidized loans, this lending option comes from the Department of Education. You will also need to fill out a FAFSA to apply. You can also ask your school’s financial aid office for more information or guidance. However, those that can qualify for these loans are slightly different from the students that qualify for direct subsidized loans. The students that could be able to get this kind of loan are undergraduate students, graduate students, and professional students.
These are only a few of the federal lending opportunities that can support you! To learn more, you should consider contacting a professional for help. They will be able to tell you more about how each loan works and the types of benefits you can find. As you can see, there are loans for different needs and different groups of people, like veterans and students. You should definitely explore these lending options, especially since they offer additional benefits.
However, another option to consider would be federal benefits that offer financial support. The federal government offers federal benefits to low-income families that need financial support. There are different kinds of federal benefits out there that can help with different needs, similar to federal loans. Either way, you can turn towards these options for help! Who knows? Maybe, you can achieve your dream after all!