Which type of loan generally offers a guarantee from the government?

The option indicating both VA and FHA loans is correct because both types of loans are backed by the government, providing assurance to lenders and making it easier for borrowers to qualify for financing.

VA loans are guaranteed by the Department of Veterans Affairs and are available to eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. This guarantee allows lenders to offer favorable terms without requiring a down payment or mortgage insurance, significantly benefiting those who have served in the military.

FHA loans, on the other hand, are insured by the Federal Housing Administration. This insurance protects lenders against losses if the borrower defaults, allowing them to offer loans with lower down payments and credit score requirements. FHA loans cater primarily to first-time homebuyers or those with less-than-perfect credit.

In summary, both VA and FHA loans offer government guarantees, making it easier for borrowers to secure financing under advantageous terms. Therefore, choosing the option that includes both reflects a comprehensive understanding of how these loans are supported by government entities.