FHA (Federal Housing Administration)
The FHA, or Federal Housing Administration, is a U.S. government agency operating under the Department of Housing and Urban Development (HUD). It provides mortgage insurance for home loans issued by FHA-approved lenders. The FHA is the largest insurer of mortgages globally, covering both single-family and multi-family homes.
Lenders become FHA-approved by meeting specific requirements, which helps protect them from significant losses if a borrower defaults on a loan. If a borrower struggles to keep up with monthly payments, the FHA loan mortgage holder can file a claim with the FHA, reducing their financial risk.
The FHA is self-sustaining and operates without funding from federal taxes. It generates its income from the mortgage insurance premiums paid by borrowers. The FHA plays a vital role not only in facilitating real estate development but also in stimulating the overall economy by fostering job growth, supporting building suppliers, enhancing educational opportunities, and contributing to local tax bases.