Government Loans: Finding The Right One For You – Part 2


Are you struggling with the high cost of housing? The federal government may have the answer. The government offers programs to help you buy a new home, fix your existing home, buy manufactured homes and rural homes, and even recover from a disaster. They also offer lending, targeting special-interest groups like Native American and veteran borrowers.

Basic FHA (Federal Housing Administration) Insured Home Mortgage – FHA approved lenders provide financing for single-family homes under this program. The lender provides the money, and the government provides mortgage insurance that allows the lender to offer competitive terms even if your credit score is not the best. You have to pay for the insurance, though, so if you have good credit, a commercial mortgage might be a better deal.

Home Rehabilitation Mortgage Insurance – FHA approved lenders provide credit with government-supplied insurance that lets you finance a house and renovate it, or refurbish your existing house.

Manufactured Home Loan Insurance – FHA approved lenders offer this program to support those looking to buy a manufactured home, which many conventional mortgage providers will not cover.

Combination Mortgage Insurance for Manufactured Home and Lot – FHA approved lenders offer this program for people looking to buy a manufactured home. There’s one difference, though. This one also includes money for the lot on which to place that home.

Property Improvement Loan Insurance – FHA approved lenders provide financing for repairs and improvements to your home.

FHA PowerSaver Home Energy Retrofit Loan Pilot Program – This program finances up to $25,000 for energy saving home improvements such as insulation, duct sealing windows and doors, HVAC, water heaters, solar and geothermal systems. There are several qualification requirements, so be sure to check before you apply.

These programs are specific to Native Americans:

Indian Home Loan Guarantee Program – This program finances homes built by Native Americans on Native American land. There’s a 30-year repayment period at an interest rate 150% less than the FHA limits for the area.

Direct Home Loans for Native American Veterans – This program provides financing for veterans who are Native Americans or married to Native Americans to buy, build or improve a house on Indian land.

These programs are for rural housing. They provide modest, clean housing for low-income people in rural areas:

Rural Housing: Farm Labor Housing Loans and Grants – Farmers and organizations can get financing covering all housing costs for domestic farmers, farm-processors, and aquaculture. The program covers buying the site, as well as construction costs for housing and childcare facilities. You’ll pay a minimal 1% interest for 33 years.

Rural Housing Loans – This initiative allows low-income people living in rural areas to build, buy, or improve modest, clean housing, including manufactured housing. Interest can be as low as 1% for 33 to 38 years.

Rural Housing: Housing Repair Loans and Grants – Support for low-income people living in rural areas to fix, modernize, improve, or remove health hazards from existing housing. Amounts can be up to $20,000, offered at 1% interest for 20 years. If you borrow over $7,500, you’ll need a mortgage and full title services. Grants may be available as well.

The following programs offer financial assistance for building, rebuilding or repairing homes destroyed by a declared disaster:

Home and Property Disaster Loans – The SBA provides financing to repair damage to your home from a declared disaster. Homeowners can borrow up to $200,000 to restore their damaged house to its pre-disaster condition, and both homeowners and renters can borrow up to $40,000 to replace damaged personal property like clothes, furniture, and cars.

Home Mortgage Insurance for Disaster Victims – Covers costs to rebuild or replace homes destroyed by a declared disaster.

These programs are for veterans or active service members:

Cash-Out Refinance Loan – Veterans or active service members can trade equity in a house for cash. They can use this money as cash at closing, pay off liens or debt, make improvements, or even refinance a non-Veteran’s Association (VA) loan into a VA loan.

Interest Rate Reduction Refinance Loan (IRRRL) – Allows you to refinance a VA loan for a lower interest rate.

There are a great many housing-financing programs, from the standard FHA mortgage to specific programs for rural homeowners, veterans, Indians, and disaster survivors. The government has programs in place for millions of Americans. Take the time to research your situation to make the best choice among the available opportunities. See if you qualify, and always shop around for the best rates. After all, a smart consumer is a satisfied consumer.


The federal government has many programs designed to help Americans finance their dreams, whether those dreams involve buying a house, starting a business, paying for college, or protecting themselves and their property from natural disasters. Some of these initiatives only apply to specific situations and groups of people, so you need to check whether your situation fits within the government requirements. With knowledge of the right government resources, that once-elusive dream might just be in reach!

To navigate through all these programs, take the time to assess your own needs and match them up with the available loans. You can learn more about the various government financing programs and how to apply for them at