Loans guaranteed by a government agency are known as ____________.

Loans guaranteed by a government agency are indeed classified as VA loans, which stands for Veterans Affairs loans. These loans are designed specifically to provide home financing for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves, making them a key financial resource for those who have served in the military.

The VA loan program offers several advantages, including no down payment requirements in many cases, competitive interest rates, and no need for private mortgage insurance (PMI). This makes homeownership more accessible and affordable for veterans compared to conventional loan products.

In contrast, FHA loans, while also government-backed, are specifically insured by the Federal Housing Administration and cater to a different demographic, typically first-time homebuyers or those with lower credit scores. Private loans are issued by private lenders and are not backed by any government agency, which means they come with different eligibility criteria and potentially higher interest rates. Subprime loans are offered to borrowers with lower credit ratings and are also not government-backed, often featuring higher interest rates and less favorable terms. This distinction underscores why VA loans are specifically recognized as loans guaranteed by government agencies.