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Simple English definitions for legal terms
Federal Housing Administration
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A quick definition of Federal Housing Administration:
The Federal Housing Administration (FHA) is a part of the Department of Housing and Urban Development (HUD) that helps people get mortgages to buy homes. They make sure that the homes meet certain standards and then insure the mortgage loans. This means that if the borrower can't pay back the loan, the FHA will help cover the costs. The HUD is a government department that helps make sure everyone has a fair chance to find a good place to live and helps improve communities across the country.
A more thorough explanation:
The Federal Housing Administration (FHA) is a division of the Department of Housing and Urban Development (HUD) that encourages mortgage lending by insuring mortgage loans on homes that meet the agency's standards.
For example, if a borrower wants to buy a home but doesn't have a large down payment, a lender may be hesitant to approve the loan. However, if the borrower qualifies for an FHA-insured loan, the lender can feel more confident in approving the loan because the FHA will guarantee a portion of the loan.
The FHA's goal is to make homeownership more accessible to more people by reducing the risk for lenders. This helps more people become homeowners and strengthens the housing market overall.
Federal Home Loan Bank Board | Federal Housing Finance Board