The FHA provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals. It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.
FHA-insured loans require very little cash investment to close a loan and there is more flexibility in calculating household income and payment ratios than conventional loans.
FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans.
FHA operates entirely from its self-generated income and costs the taxpayers nothing. The proceeds from the mortgage insurance paid by the homeowners are used to operate the program entirely.