Final answer:
A buyer looking for an FHA or VA loan should apply through an approved mortgage banker. The FHA and VA do not lend directly, rather they guarantee loans through approved lenders who adhere to set guidelines.
Step-by-step explanation:
A buyer who wants to obtain an FHA or VA loan should apply through an approved mortgage banker. The Federal Housing Administration (FHA) and the Veterans Administration (VA) do not issue loans directly to consumers but instead guarantee loans made through approved lenders. These lenders are usually banks, credit unions, and specialized mortgage bankers that have been approved by the FHA or VA to originate, underwrite, and fund loans that meet FHA and VA guidelines.
FHA loans were created as part of the New Deal to encourage banks to offer home loans with favorable terms to buyers, which helped increase homeownership rates. Meanwhile, VA loans provide assistance to veterans and have similar application processes through approved lenders. It is important for a buyer to work with financial institutions that understand the requirements and benefits of these government-backed loan programs.