What is the primary function of the FHA?

The primary function of the Federal Housing Administration (FHA) is to insure loans made by private lenders. This insurance protects lenders against losses that may occur if a borrower defaults on a loan. By providing this insurance, the FHA enables lenders to offer more favorable loan terms, such as lower down payments and interest rates, which can help more individuals and families secure financing for home purchases. The FHA's role in insuring loans promotes stability in the housing market and increases accessibility to homeownership, especially for first-time buyers and those with less-than-perfect credit.

In contrast, the other options do not accurately describe the FHA's role. The FHA does not lend money directly to borrowers, and it does not engage in property management or oversee real estate transactions. Its focus is specifically on insuring loans to minimize the financial risk for lenders.