What classification do mortgages insured by the FHA or guaranteed by the VA fall under?

Mortgages insured by the Federal Housing Administration (FHA) or guaranteed by the Department of Veterans Affairs (VA) are classified as government loans. This classification indicates that these loans are established and supported by government agencies to promote home ownership, especially among individuals who may not qualify for conventional financing due to credit score or down payment requirements.

Government loans, such as those backed by the FHA or VA, come with specific benefits that cater to certain borrower demographics, including lower down payment options and reduced mortgage insurance costs. FHA loans, for example, are designed to assist first-time homebuyers, while VA loans provide favorable terms to eligible veterans and active-duty military personnel.

Conventional loans, in contrast, are not insured or backed by any government agency and typically have more stringent requirements. Private loans are offered by individuals or companies not involved with the government and often have much higher rates and stricter terms. Subsidized loans usually refer to those that have reduced interest rates or payments supported by the government, but they are not the specific product classification of FHA or VA loans. Thus, the classification of these mortgages distinctly falls under the category of government loans.