Loan programs
FHA loan
A loan made by an approved lender and insured by the Federal Housing Administration
The FHA insures; it does not lend. The insurance reduces the lender’s risk, which is what allows a lower down payment than a conventional loan typically requires, and the borrower pays a mortgage insurance premium for it.
How the exam asks about it
"The FHA does not make loans" is stated on exams more often than almost any other financing fact.
Related terms
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