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FHA stands for Federal Housing Administration; the FHA is an arm of the Department of Housing and Urban Development (HUD). The primary focus of the FHA is to encourage homeownership in the United States. To do this, the FHA insures mortgages against borrower default.
Growth and stability in the housing market were key goals in founding the FHA. The Federal Housing Administration, or FHA, is a government agency that originated as part of the 1934 National Housing Act. Congress designed it to help facilitate growth in mortgage loan opportunities after the Great Depression created tough economic conditions and caused the housing industry to struggle.