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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.
FHA provides a huge economic stimulation to the country in the form of home and community development, which trickles down to local communities in the form of jobs, building suppliers, tax bases, schools, and other forms of revenue. Congress created the Federal Housing Administration (FHA) in 1934.