What type of insurance does the FHA provide?

The Federal Housing Administration (FHA) provides mortgage insurance specifically designed for low-to-moderate income borrowers. This type of insurance ensures that lenders are protected against losses when borrowers default on their loans. By providing this insurance, the FHA encourages lenders to offer loans with lower down payments and more lenient credit requirements, which broadens access to homeownership for individuals and families who might otherwise struggle to qualify for conventional financing.

Mortgage insurance through the FHA helps to stabilize the housing market by making home financing accessible to a larger segment of the population, particularly first-time homebuyers. It also mitigates risk for lenders, easing the lending process and contributing to overall market liquidity.

Other options mentioned do not pertain to the FHA's focus or function. Health insurance, fire insurance, and life insurance cover different types of risks and needs unrelated to the core purpose of the FHA, which is centered around facilitating home financing through mortgage insurance.