In real estate finance, the Federal Housing Administration (FHA) is an agency of the federal government that insures mortgage loans made by approved private lenders. The FHA does not lend money directly to borrowers but provides insurance that protects lenders against losses if a borrower defaults.
By insuring loans for the purchase of new and existing homes as well as certain home repairs, the FHA helps expand access to homeownership. FHA insured loans often feature lower down payment requirements and more flexible credit standards, making them especially important for first time and moderate income buyers.
