The following are some loan categories provided by the U.S. government. Although variations may exist in other nations, these categories generally apply globally.
Loans for Housing and Urban Development
Home loan financing makes up the greatest portion of the government lending market. Most loan programs fall under this area, including loans for home purchases, energy efficiency improvements, interest rate reduction, and funding for home repairs and upgrades. Common lending programs are as follows:
- Loans for first-time homebuyers
- FHA Loans
- Loans Refinancing
- V.A. Loans
- The FHA 203(k) Loan
From the perspective of the lender (and sponsor), these loans are deemed the safest because tangible assets back them as backups in the event of default.
Education Loans
Education loans are used to pay for specialized courses in research or undergraduate and graduate higher education. There are specific financing schemes for research in various healthcare specialties, including AIDS, contraception, infertility, nursing, and pediatrics. Typical student loan programs include:
- Government Direct Loans
- A PLUS Loan
- Loans with a direct consolidation
Aspired students’ education for original research or courses only offered abroad may also be supported by the government. Loans for international programs could also come with additional requirements, such as starting a public sector job after graduation.
Lenders and sponsors view student loans as the riskiest category since they depend so much on the borrowers and may not be supported by tangible assets (such as property, in the case of home loans).
Loans for Businesses and Industries
With a stagnating economy, neither a nation nor a community can prosper. A country’s economy’s total growth depends on several factors, including innovation, entrepreneurship, employment, and healthy competition.
These areas of development are encouraged by the loan programs provided in the commercial and industrial loan categories. Small, medium-sized, and big firms and sectors can apply for business loans for various terms.
Funding can be used to purchase real estate, buildings, tools, machinery, and maintenance for business-specific requirements. One of the programs’ other distinctive variations is offering managerial help to qualified small start-ups with excellent development potential.
Loans for agricultural, rural, and farm services
These loans offer money to support farming, which can result in food security and rural economic growth. There are numerous financing options available for agricultural services and agriculture. Within the bounds of the qualifying requirements, capital permits the acquisition of acreage, animals, feed, and even farm machinery and equipment.
Additionally, loans are accessible for building cold storage, processing, handling facilities for specific commodities, and on-farm storage. Other loans are offered for aquaculture, mariculture, commercial fishing, and fisheries. The Farm Labor Houses Loans and Grants Program for Dedicated Rural Housing provides funding for the construction and upkeep of housing for domestic farm laborers.
Veteran-specific loans
The federal government of the United States offers benefits to service members who qualify, such as veterans, reservists, National Guard troops, and some surviving spouses. The loans can be used for debt refinancing and to buy, keep, and modify homes. Other costs may be covered by financial benefits, depending on the programs.
Loans for Disaster Relief
Disaster relief loans provide coverage for losses caused by natural and man-made disasters for commercial enterprises, residential construction, and agriculture. Businesses may be compensated for the absence of critical personnel who are enlisted in the military and are required to report for duty.
Such disaster relief loans come to the aid of owners and employees if a business, farm, house, or other property is affected by a disaster and the area is designated a disaster area. Owners and employees can get assistance to rebuild both their personal lives and the businesses and properties that the disaster destroyed.
For businesses impacted by the economic crisis, the SBA increased money for its Economic Injury Disaster Loan program as part of the CARES Act, the Paycheck Protection Program, and the Health Care Enhancement Act.