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FHA stands for Federal Housing Administration; the FHA is an arm of the Department of Housing and Urban Development (HUD). The primary focus of the FHA is to encourage homeownership in the United States. To do this, the FHA insures mortgages against borrower default.
1934: Federal Housing Administration Created. The Federal Housing Administration (FHA) revolutionized home ownership by creating our current financial mortgaging system. In the process, it produced a lending structure which helped to solidify the racial segregation that still exists today.