Federal Housing Administration (FHA)

The Federal Housing Administration (FHA) is a government agency within the U.S. Department of Housing and Urban Development (HUD) that provides mortgage insurance on loans made by FHA-approved lenders. The FHA was established in 1934 as part of the National Housing Act and is responsible for expanding homeownership opportunities for more Americans, particularly those with low and moderate incomes.

The primary function of the FHA is to provide mortgage insurance on loans made by approved lenders, which helps to reduce the risk to lenders and encourage them to lend to borrowers who may not meet the requirements for conventional financing. FHA loans typically have more flexible credit and income requirements than conventional loans, making them a popular option for first-time homebuyers and other borrowers who may not qualify for other types of financing.

In addition to mortgage insurance, the FHA also sets standards for property appraisals and underwriting guidelines for its approved lenders. The agency also provides education and counseling services to help homebuyers and homeowners better understand the home buying and owning process.

Overall, the FHA plays a significant role in expanding access to homeownership and promoting affordable housing in the United States. While it primarily serves as an insurer of mortgages, the agency’s programs and services have had a significant impact on the housing market and have helped millions of Americans achieve their dream of homeownership.