Final answer:
Government lenders offer home loans to borrowers with blemished credit or no credit history. Subprime loans feature higher interest rates than conventional mortgages to compensate for the increased risk.
Step-by-step explanation:
The correct answer is B) Government.
Government lenders offer home loans to borrowers who have blemished credit or who have not had an opportunity to establish credit. These types of loans are commonly known as subprime loans. Subprime loans feature higher interest rates than conventional mortgages to compensate the bank for the increased risk of default.
Government lenders may include entities such as the Federal Housing Administration (FHA) or the U.S. Department of Veterans Affairs (VA). These government agencies provide guarantees or insurance on the loans, which reduces the risk for the lender, making it easier for them to extend credit to borrowers with less-than-perfect credit.