What does the acronym FHA stand for?

The acronym FHA stands for the Federal Housing Administration. This agency plays a critical role in the U.S. housing market by providing mortgage insurance on loans made by approved lenders to borrowers with low to moderate incomes. The FHA was created in 1934 to help stimulate the housing market during the Great Depression and to make home ownership accessible to a broader range of Americans.

The Federal Housing Administration's insurance helps lenders mitigate their risks, which encourages them to offer mortgages to borrowers who might not qualify for loans under conventional terms. This significantly contributed to the expansion of home ownership in the United States. Understanding the role and function of the FHA is essential for mortgage loan originators, as it directly influences lending practices and policies in the market.