What does FHA refer to?

The correct answer is the Federal Housing Authority. FHA stands for the Federal Housing Administration, which is a government agency under the Department of Housing and Urban Development (HUD) in the United States. The FHA was established to improve housing standards and to provide a stable market for home financing. It does this by insuring loans made by approved lenders to borrowers with low to moderate incomes. This insurance protects lenders against losses from borrower defaults, thus encouraging them to offer loans to people who might otherwise struggle to secure financing, thereby stimulating the housing market.

Understanding the role of the FHA is crucial, as it impacts access to affordable housing and the overall economy. The options that do not accurately represent FHA’s full title or its function miss the mark significantly, leading to confusion about the agency's role in facilitating home ownership across different demographics.