Finance
The Federal Housing Administration (FHA) does which of the following?
AMakes direct mortgage loans to homebuyers
BInsures approved mortgage lenders against losses from borrower default✓ Correct
CSets maximum interest rates for residential mortgages
DDirectly regulates Tennessee mortgage brokers
Explanation
The FHA is a government agency within HUD that insures mortgage loans made by approved private lenders. This insurance reduces lender risk and allows lenders to offer mortgages to borrowers with lower down payments and credit scores.
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