What type of loan is backed by the Federal Housing Administration (FHA)?

The Federal Housing Administration (FHA) specifically provides insurance for a particular type of mortgage loan that is designed to help individuals and families become homeowners. This is known as an FHA loan. These loans are aimed at low to moderate-income borrowers who may have lower credit scores or smaller down payments compared to traditional loans.

FHA loans allow borrowers to qualify for loans with a down payment as low as 3.5%, making homeownership more accessible to a broader segment of the population. The government backing provides lenders with more assurance, which helps them offer more favorable terms to borrowers.

The other options refer to different types of loans. Conventional loans are not insured by any government agency and often require higher credit scores and down payments. VA loans are specifically for veterans and active military personnel and are backed by the Department of Veterans Affairs, offering unique benefits like no down payment. Home equity loans allow homeowners to borrow against the equity in their homes, which is a different concept altogether. Therefore, the only option that directly relates to loans backed by the FHA is indeed the FHA loan.