Which of the following is a government-sponsored mortgage that helps those with low and moderate incomes purchase a home?

Which of the following is a government-sponsored mortgage that helps those with low and moderate incomes purchase a home?

• A. Conventional loan
• B. FHA insured loan
• C. VA loan
• D. Jumbo loan

Answer: (B)

FHA insured loan is the best answer because the Federal Housing Administration provides insurance on these loans, which lowers the risk for lenders and makes borrowing more accessible for buyers with smaller down payments and modest credit. You can often put down as little as 3.5% and still qualify if your credit is not perfect, though you’ll pay mortgage insurance. This contrasts with conventional loans, which aren’t government-insured and typically require higher down payments and stricter credit criteria. A VA loan is also government-backed but is targeted specifically to veterans and their families, not necessarily low- to moderate-income buyers. Jumbo loans are for unusually large loan amounts and aren’t backed by government insurance. So, the program designed to help low- and moderate-income buyers most directly is the FHA insured loan.

FHA insured loan is the best answer because the Federal Housing Administration provides insurance on these loans, which lowers the risk for lenders and makes borrowing more accessible for buyers with smaller down payments and modest credit. You can often put down as little as 3.5% and still qualify if your credit is not perfect, though you’ll pay mortgage insurance. This contrasts with conventional loans, which aren’t government-insured and typically require higher down payments and stricter credit criteria. A VA loan is also government-backed but is targeted specifically to veterans and their families, not necessarily low- to moderate-income buyers. Jumbo loans are for unusually large loan amounts and aren’t backed by government insurance. So, the program designed to help low- and moderate-income buyers most directly is the FHA insured loan.