For whom does the FHA aim to provide mortgage insurance?

The Federal Housing Administration (FHA) aims to provide mortgage insurance primarily for buyers with lower credit scores. This program is designed to assist individuals and families who may not qualify for conventional financing due to factors such as limited credit history or lower income. By offering mortgage insurance, the FHA enables lenders to offer loans with lower down payments and more flexible underwriting standards. This, in turn, helps increase access to homeownership for a broader range of potential buyers who might otherwise be locked out of the housing market due to stringent credit requirements.

In contrast, wealthy investors, real estate companies, and home improvement contractors do not primarily benefit from FHA-insured loans. The focus of the FHA is on supporting first-time homebuyers and those with less favorable financial profiles, enabling them to achieve homeownership.