What agency provides mortgage insurance on loans made by FHA-approved lenders?

The Federal Housing Administration (FHA) is the agency responsible for providing mortgage insurance on loans made by FHA-approved lenders. This insurance protects lenders against losses if borrowers default on their loans, making it easier for individuals to secure financing for a home. The FHA was established to promote home ownership and improve access to affordable financing, particularly for first-time homebuyers or those with lower credit scores. This function is crucial in the overall housing market, as it mitigates the risk for lenders and encourages them to offer loans to a wider array of borrowers, thereby promoting homeownership.

Other agencies listed do not serve this specific function. The Federal Bureau of Housing does not exist as a distinct agency related to mortgage insurance, and the Department of Housing and Urban Development (HUD) oversees various housing programs but does not provide direct mortgage insurance. The Mortgage Insurance Corporation is not a recognized agency within the federal housing system regarding FHA loans.