What is the primary purpose of the Federal Housing Administration (FHA)?

The primary purpose of the Federal Housing Administration (FHA) is to increase home ownership by offering insurance to lenders. This means that when lenders provide loans for home purchases that are insured by the FHA, they have a reduced risk associated with those loans. The FHA provides mortgage insurance on loans made by approved lenders, which encourages them to lend to borrowers who might otherwise not qualify due to lower credit scores or smaller down payments. As a result, this program aims to make home ownership more accessible, particularly for first-time homebuyers and lower-income families.

The FHA's insurance mechanism is crucial because it allows lenders to feel more secure in lending money, which can stimulate the housing market and contribute to the overall economy by enabling more people to become homeowners. The focus is on enhancing access to home ownership opportunities, making option B the correct choice.