Question

What type of loan is neither guaranteed nor insured by government agencies?

(A) FHA Loan
(B) VA Loan
(C) Conventional Loan
(D) USDA Loan

Answer 1

A Conventional Loan option(c) is not guaranteed or insured by any government agency, unlike FHA, VA, and USDA loans which are government-backed.

Step-by-step explanation:

The type of loan that is neither guaranteed nor insured by government agencies is (C) Conventional Loan. An FHA loan is insured by the Federal Housing Administration, while a VA loan is guaranteed by the Department of Veterans Affairs, and USDA loans are backed by the United States Department of Agriculture.

Conventional loans, on the other hand, are not insured or guaranteed by any government agency, which usually requires a higher down payment and a better credit score than government-backed loans. These loans often adhere to the guidelines set by Fannie Mae or Freddie Mac.

Answer 2

A Conventional Loan (Option C) is the type of loan that is not backed by a government agency. FHA Loans are insured by the Federal Housing Administration and illustrate the New Deal's impact on homeownership and urban development, but are distinct from conventional loans, which are privately funded and based on borrower qualifications.

Step-by-step explanation:

The type of loan that is neither guaranteed nor insured by government agencies is a Conventional Loan (Option C). Unlike FHA Loans, which are insured by the Federal Housing Administration, or VA Loans, guaranteed by the Department of Veterans Affairs, conventional loans are not affiliated with any government agency. They are often issued by private lenders like banks, credit unions, or mortgage companies. Conventional loans are more risk-based, with eligibility and rates determined by the borrower's credit score and down payment amount.

FHA loans, were a critical part of Franklin D. Roosevelt's New Deal, aimed at stimulating homeownership by ensuring affordable loans. The FHA made significant contributions to increasing homeownership post the Great Depression and after World War II, but also played a controversial role in residential segregation through practices like redlining. However, these historical perspectives do not alter the fact that FHA loans are still government-insured, which is in contrast to conventional loans.