A government-backed loan is a loan subsidized by the government, also known in the United States as a Federal Direct Loan, which protects lenders against defaults on payments, thus making it a lot easier for lenders to offer potential borrowers lower interest rates. Its primary aim is to make home ownership affordable to lower income households and first-time buyers.

The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (August 2023)

There are numerous types of government-backed loans, which vary dependent on the country and status of the borrower. Arguably, the most widely known type of government-backed loan is the US Federal Housing Administration FHA loan, in existence since 1934.

Other types of government-backed loans include the following:

• American Dream Downpayment Initiative - ADDI
• Good Neighbor Next Door
• HOPE VI
• Teacher Next Door Program
• VA loan
• State of New York Mortgage Agency – SONYMA

• FHA insured loan

• Office of Housing

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