Who funds the FHA (Federal Housing Administration)?

The Federal Housing Administration (FHA) is funded through various means primarily involving its relationship with the Department of Housing and Urban Development (HUD). HUD is the federal department that administers the FHA and oversees its functions, including mortgage insurance programs designed to support housing affordability. The FHA mainly generates its funding through the insurance premiums collected from borrowers who take out FHA-insured loans. This funding structure allows the FHA to ensure that it can provide a safety net for lenders by covering losses on defaulted loans, which in turn helps increase access to home financing for lower-income and first-time buyers.

The financial mechanisms and policies of the FHA are closely tied to HUD's operations, making the Department of Housing and Urban Development the central entity in the funding and oversight of the FHA's programs.