An FHA-insured mortgage has less risk than a conventional mortgage for the financial institution.

Question

Quizplus · Accepted Answer

FHA-insured mortgages have less risk for financial institutions because they are guaranteed by the federal government, which means that if the borrower defaults on the loan, the government will reimburse the lender for its losses. This guarantee reduces the risk for the lender, making FHA-insured mortgages more attractive and easier to obtain for borrowers who may not qualify for conventional mortgages.

An FHA-Insured Mortgage Has Less Risk Than a Conventional Mortgage