Finance
In New Mexico, which of the following is a primary function of the FHA (Federal Housing Administration)?
AMaking direct mortgage loans to homebuyers
BInsuring approved lenders against losses from borrower default✓ Correct
CSetting interest rates for all residential mortgages
DProviding down payment grants to first-time buyers
Explanation
The FHA does not make loans—it insures approved lenders against borrower default. This insurance reduces lender risk, enabling lenders to offer mortgages with lower down payments and more flexible credit requirements.
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