What types of loans are insured by the Federal Housing Administration (FHA)?

The Federal Housing Administration (FHA) primarily insures loans designed to support lower-income individuals and first-time homebuyers. This insurance makes it easier for these borrowers to qualify for mortgages, as FHA loans typically have more lenient credit score requirements and allow for lower down payments compared to conventional loans. This focus on accessibility to homeownership helps to stimulate the housing market by allowing a wider range of people to enter the market, particularly those who may not have substantial savings or a strong credit history.

In contrast, options that refer to high-income borrowers or loans for investment properties do not align with the FHA's mission. The FHA does not insulate loans targeted at wealthier individuals, nor does it provide insurance for loans intended for financing investment properties or short-term property flipping, as those markets generally operate outside the FHA's objectives of promoting homeownership among lower-income families and individuals looking to settle into a home for the longer term.