Is the statement "The Federal Housing Administration is a mortgage lender allowing home ownership with little down payment" true or false?

The statement "The Federal Housing Administration is a mortgage lender allowing home ownership with little down payment" is true. However, the Federal Housing Administration (FHA) is not a mortgage lender; it is a government agency that provides mortgage insurance on loans made by approved lenders to borrowers with low to moderate incomes. This insurance allows lenders to offer loans with a lower down payment, typically as low as 3.5%.

Understanding this distinction is crucial. The FHA does not directly give loans; instead, it guarantees loans made by private lenders, thus encouraging those lenders to provide financing options that might otherwise be unavailable, especially to first-time homebuyers or those with lower credit scores.

Other options in the question may cause confusion but do not fully capture the role of the FHA as a facilitating agency rather than a lender. Therefore, recognizing the accurate role that the FHA plays in the home mortgage process clarifies why the statement is indeed true.