(DailyAnswer.org) – According to an April 3, 2023 report, Americans owed $16.9 trillion by the end of 2022. This accounts for $1.60 trillion in student loans, $1.55 trillion in vehicle loans, $11.92 trillion in mortgages, and $986 billion in credit card debt. The government effectively empowers Americans with financial advances through respective departments to keep their businesses running. Federal loans are affordable and allow income-based repayments. These are some available federal loan programs.
Section 504 Home Repair Program Loans
This rural development program is under the U.S. Department of Agriculture. Also called Single Family Housing Repair Loans & Grants, this loan benefits communities that live in rural America. It helps low-income households repair and modernize their homes. It also helps eligible applicants build or purchase a home in eligible areas. To qualify for this $40,000 loan, one must use their home as a primary residence, and the presented proof of income must be low or very low. Applicants above age 62 can qualify for a grant of at most $10,000. Applications are available in the state offices.
Federal Housing Administration (FHA) Loans
The Federal Housing Administration does not outsource loans. They insure a loan so that the lender can:
- Provide a loan
- Lower closing costs
- Lower down payments
To qualify for this loan, an FHA-approved appraiser must evaluate the primary residence one may choose. One must also prove a steady income from employment and a debt-to-income ratio of not more than 43%. One must occupy the home within 60 days after the loan is in effect. FHA lenders are available countrywide.
Small Business Loans
This loan is under the U.S. Small Business Administration. The SBA works with lenders to facilitate small businesses in America that meet the qualifications. The business must explain the need and utilize the loan for the stated purpose only to qualify for this loan. The maximum amount for an SBA loan is $5 million. No application, processing, brokerage, or origination fees are charged for an SBA loan. The business owner must have a reasonable equity to invest and propose to do business within the U.S. borders and territories.
Student Direct PLUS Loan
The U.S. Department of Education facilitates Student Direct PLUS loans. This federal loan helps students and parents pay for expenses unavailable in other financial aid, such as college tuition and room for on-campus students. This loan is available as Direct PLUS Loan when made to a parent and a grad PLUS loan when made to a graduate student. To qualify for this loan, the applicant must have a good credit history and fill out the Free Application for Federal Student Aid (FAFSA®) form. The applicant must be the adoptive or biological parent of an undergraduate student. The amount disbursed is determined by the cost of attendance minus any financial aid received.
Veterans Affairs (VA) Loans
The Veteran Affairs establishes eligible veterans, service members, and surviving spouses to lenders who assist them in building, buying, upgrading, repairing, or adapting a home. Applicants must have completed at least 90 days active duty, six years in National Guard or Reserves, or be honorary discharged. One must also have an active service of at least 181 days during peacetime. If the applicant is a spouse, the veteran must have died during active duty or succumbed to duty-related injuries or disability. Qualified applicants receive a Certificate of Eligibility (COE) from Veterans Affairs as proof to the lenders. The certificate can also be applied via the lender.
Federal loans are not free money and are only available to some. Any federal loan program is available to eligible applicants who have diverse needs. The relevant departments provide information on how to apply and their way of determining eligible applicants.
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