The Federal Housing Administration (FHA) is a U.S. government agency that provides mortgage insurance on mortgages made by FHA-approved lenders. The FHA was created in 1934 as part of the National Housing Act, and its purpose is to provide mortgage insurance on loans made by private lenders for the purchase of homes. This insurance helps to protect the lender against loss if the borrower defaults on the loan, and it allows borrowers who might not otherwise qualify for a conventional mortgage to purchase a home. The FHA does not actually make loans, but instead it insures mortgages made by private lenders, meaning that if the borrower defaults on the loan, the FHA will pay the lender.
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