Which federal agency established in 1943 aimed to increase home ownership by providing an insurance program to safeguard lenders against risk?

• A. Department of Housing and Urban Development
• B. Department of the Interior
• C. Department of Transportation
• D. Department of Education

Answer: (A)

Expanding home ownership through government-backed mortgage insurance is the central idea. When the government insures a mortgage, lenders face less risk if a borrower defaults, so they’re more willing to issue loans with lower down payments and longer terms. This approach is embodied by the Federal Housing Administration, created to make home loans safer for lenders and more affordable for borrowers. Today, that insurance program is administered by the Department of Housing and Urban Development, which oversees federal housing policy and the FHA’s mortgage insurance programs. Other departments focus on different areas and do not handle mortgage insurance aimed at boosting home ownership.