The federal government established the Federal Housing Administration (FHA) during the banking crisis of the 1930s as a means to stimulate the housing market by reducing risk to lenders, thus making them more likely to loan money. To accomplish that mission, FHA provides mortgage insurance on loans originated by approved lenders to protect against loss as the result of default. * According to its own estimates, the FHA--now part of the Department of Housing and Urban Development (HUD)--has insured more than 35 million mortgages since its inception by providing financing options to families that could not afford the conventional down payment on a home without assistance.
