Federal Loans

Federal loans are available for a variety of borrowing needs ranging from business and housing to education. There are six general types of federal loans for personal or business use. In each category, loans might be administered, backed or offered by one of a variety of government agencies. The loan application could be directly to a federal agency or it might be to your local bank, where a federal loan program is administered through the private sector. Federal loans often come with competitive interest rates because of government guarantees, but they also require extensive documentation of income, credit history and ability to repay.

Types of Federal Loans

Federal loans generally fall into six categories:

  • Agriculture - Seven separate federal loans for farmers and ranchers are offered by government organizations ranging from the Farm Services Agency to the Fisheries Finance Program. Borrowers can get help with leveling out income generated by swings in commodities prices, building housing for domestic farm laborers, lowering interest rates for ranchers who have trouble qualifying for commercial credit at standard rates and more.
  • Business - Federal loans can help small business owners find venture capital, recover from an emergency or simply finance growth. Specific programs target business loans for minorities, Native Americans and veterans, to name a few
  • Disaster Relief - These federal loans can help businesses recover from an emergency, from a natural disaster or from business hardship suffered as employees depart who are military reservists being called to active duty.
  • Education - More than 15 federal loans are available for educational activities ranging from help with college fees and tuition to subsidizing advanced research.
  • Housing - Eighteen federal loan programs target potential or existing homeowners. These are among the best-known programs such as the FHA loan, which stand for Federal Housing Administration. But there also are more targeted federal loan programs for minorities, low-income earners and those in danger of losing a home to foreclosure.
  • Veterans - A variety of federal loan programs help those who have served in the nation's military to obtain housing, get education or obtain financing for a wide range other needs, such as starting a business.

Finding a Federal Loan

Most available federal loan programs are administered by one of the following federal agencies: Department of Agriculture, Department of Commerce, Department of Education, Department of Housing and Urban Development, Department of Veterans Affairs, and the Small Business Administration.

Prospective borrowers can find information on federal loans through the individual agencies, or by visiting www.govloans.gov. This one-stop website lists more than a hundred federal loans in the six categories above. The site offers a description of each loan, terms of borrowing and where to go for additional information and to apply.

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