Federal Housing Administration

What Federal Housing Administration does

The Federal Housing Administration (FHA), founded in 1934 as a New Deal agency and today operating as a division of the U.S. Department of Housing and Urban Development (HUD), is the largest insurer of residential mortgages in the world. FHA does not lend directly to consumers; instead, it provides government-backed mortgage insurance through a nationwide network of 20,000+ approved lenders (banks, credit unions, and independent mortgage companies), enabling these lenders to offer home loans with down payments as low as 3.5% and more flexible credit requirements than conventional financing. Insured loans are subsequently securitized through Ginnie Mae issuers into mortgage-backed securities, providing secondary-market liquidity.

FHA's product portfolio spans FHA Home Purchase Loans (fixed-rate and ARM), Refinance Loans (Streamline, Cash-Out, and Simple Refinance), the 203(k) Rehabilitation Loan combining purchase and renovation financing, One-Time Close construction loans, HECM reverse mortgages for seniors aged 62+, Condo Loans, Jumbo Loans, Energy Efficient Mortgages, Graduated Payment Mortgages, and Growing Equity Mortgages. The agency's core underwriting technology relies on standardized guidelines plus third-party credit scoring models — most recently FICO 10T and VantageScore 4.0, adopted in 2026 to incorporate non-traditional data such as rent and utility payment history.

FHA's revenue model rests on two premium streams: an Upfront Mortgage Insurance Premium (UFMIP) of 1.75% of the base loan amount at origination, and an Annual Mortgage Insurance Premium (Annual MIP) ranging from 15 to 105 basis points depending on loan amount, loan-to-value ratio, and term. These premiums flow into the Mutual Mortgage Insurance Fund (MMI Fund), which held $188.87 billion in capital at an 11.47% capital ratio in FY2025 — the strongest level since 1990 and well above the 2% statutory minimum. FHA, together with Fannie Mae and Freddie Mac, backs approximately 70% of the U.S. mortgage market, insuring more than 876,000 single-family home mortgages annually on an insurance-in-force portfolio of roughly $1.65 trillion (part of a ~$2 trillion managed mortgage portfolio). Customer segments span first-time homebuyers, borrowers with lower credit scores, multifamily housing developers, and senior homeowners using HECM products.

Name

Federal Housing Administration

Legal name

Federal Housing Administration

Website

https://fha.com

Company type

Public

Founded year

1934

Operating status

Operating

Headcount range

501–1,000 employees

Short description

The Federal Housing Administration (FHA), a division of HUD, provides government-backed mortgage insurance through 20,000+ approved lenders, enabling low 3.5% down payment home loans for first-time and underserved borrowers across the United States.

Ownership category

akta.pro rank

Product category

Government Mortgage Insurance

NAICS

Administration of Housing Programs (92511)

SIC

Mortgage Bankers & Loan Correspondents (6162), Federal & Federally-Sponsored Credit Agencies (6111)

akta.pro primary industry

Government Mortgage Insurance & Guarantees (FHA/VA/USDA and equivalents) (FSALAJAC)

akta.pro secondary industries

Government-Insured Mortgage Origination (FHA/VA/USDA) (FSALAAAI), Affordable Housing / Down Payment Assistance (DPA) Mortgage Origination (FSALAAAM), Renovation Mortgage Origination (FHA 203(k), HomeStyle, CHOICERenovation) (FSALAAAL), Reverse Mortgage Origination (HECM & Proprietary) (FSALAIAA), Public Mortgage Insurance & Government Credit Guarantee Programs (FSALAKAD)

Keywords

• Mortgage insurance
• Government-backed loans
• FHA loan programs
• Home purchase financing
• Reverse mortgages

Headquarters

HQ city

Washington

HQ country

United States

HQ region

North America

Offices1 record

Markets served

GTM type

B2C

Offering type

Services

Cost components

Operations, Personnel, Technology or R&D, Others

Revenue model

1. Upfront Mortgage Insurance Premium (UFMIP): One-time upfront premium charged at loan origination, currently set at 1.75% of the base loan amount. This can be rolled into the loan amount.
2. Annual Mortgage Insurance Premium (Annual MIP): Recurring annual premium paid by borrowers for the life of the loan or 11 years depending on loan terms. Rates range from 15 basis points to 105 basis points based on loan amount, LTV, and term.
3. Multifamily Mortgage Insurance Premiums: Reduced multifamily mortgage insurance premiums to statutory minimum of 25 basis points

Pricing tiers

Go-to-market motion2 records

Distribution channels2 records

Marketing channels3 records

Core offering

The Federal Housing Administration (FHA) provides government-backed mortgage insurance on home loans originated by FHA-approved lenders, enabling qualified borrowers to purchase or refinance homes with down payments as low as 3.5% and more flexible credit requirements than conventional loans. FHA collects an upfront mortgage insurance premium (1.75% of loan amount) and annual premiums (15–105 basis points) and supports specialized programs including 203(k) rehabilitation loans, HECM reverse mortgages, construction loans, and multifamily rental housing financing.

Product overview

Federal Housing Administration (FHA) offers a comprehensive suite of mortgage insurance products administered through FHA-approved lenders. The core offerings include Home Purchase Loans for first-time and repeat homebuyers requiring as little as 3.5% down payment, and Refinance Loans including Streamline, Cash-Out, and Simple Refinance options. The product portfolio extends to specialized programs such as 203(k) Rehabilitation Loans for home purchase plus renovation, One-Time Close construction loans, Reverse Mortgages (HECM) for seniors, and various fixed and adjustable rate options. FHA also provides niche products including Condo Loans, Jumbo Loans, Energy Efficient Mortgages, Graduated Payment Mortgages, and Growing Equity Mortgages. The program is designed to serve first-time homebuyers and those with limited down payment savings or challenged credit histories.

Differentiator

Problem solved

Functional benefit

Products and services

• FHA Home Purchase Loans Primary FHA-insured mortgages for purchasing single-family and multi-family homes with down payments as low as 3.5% for qualified borrowers with 580+ FICO scores.
• FHA Refinance Loans Refinancing options for existing FHA loans, encompassing Streamline Refinance, Cash-Out Refinance, and Simple Refinance programs.
• FHA 203(k) Rehabilitation Loans Financing that combines home purchase and rehabilitation into a single mortgage, covering both acquisition and renovation costs.
• FHA Reverse Mortgages (HECM) Home Equity Conversion Mortgages allowing seniors aged 62 and older to convert home equity into tax-free income with no required monthly mortgage payments.
• FHA Fixed Rate Loans 30-year and 15-year fixed-rate FHA-insured mortgages with consistent monthly payments throughout the loan term.
• FHA Adjustable Rate Mortgages (ARM) FHA-insured mortgages whose interest rates adjust periodically based on market conditions after an initial fixed-rate period.
• FHA One-Time Close Loans Single-close construction loans that finance both the lot purchase and construction, wrapping everything into one permanent mortgage.
• FHA Jumbo Loans FHA-insured loans exceeding standard FHA county limits, requiring higher minimum credit scores (600+) and larger down payments.
• FHA Condo Loans FHA mortgage insurance for condominium unit purchases under FHA-approved condo projects.
• FHA Streamline Refinance Simplified refinancing process for existing FHA borrowers requiring minimal documentation, no appraisal, and reduced paperwork.
• FHA Cash-Out Refinance Refinancing option allowing borrowers to withdraw equity from their home by borrowing more than the existing mortgage balance.
• FHA Energy Efficient Mortgages Loans that include financing for energy-saving improvements as part of the mortgage or as a separate modification.
• FHA Graduated Payment Mortgages Loans with lower initial payments that gradually increase over time, designed for borrowers expecting future income growth.
• FHA Growing Equity Mortgages Mortgages with payments that increase over time, accelerating payoff and building equity faster.
• FHA Multifamily Mortgage Insurance Mortgage insurance for multifamily rental housing (typically 5+ units) at the statutory minimum premium of 25 basis points, supporting new construction, substantial rehabilitation, and refinancing of qualifying multifamily properties.

Quantifiable outcome

• Capital ratio of 11.47%, highest level since 1990
• +4 more outcomes

Named customers3 records

Segments4 records

Ideal customer profiles4 records

Technology focussed No

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Feature4 records

Partnerships

Four partnerships are on record, tiered core and flagship.

• Fannie MaecoreStrategic or Co-development Partner · 22 April 2026Fannie Mae works with FHA on mortgage credit access modernization, jointly accepting alternative credit scoring models (VantageScore 4.0, FICO 10T) for mortgage underwriting.
• Freddie MaccoreStrategic or Co-development Partner · 22 April 2026Freddie Mac participating in pilot program for VantageScore 4.0, with approximately $10 million in loans already securitized under the new model.
• Ginnie MaecoreStrategic or Co-development Partner · 2 April 2026Ginnie Mae and FHA coordinate on loss mitigation policies, including temporary exclusion of FHA Trial Payment Plans from issuer delinquency calculations.
• U.S. Department of Housing and Urban Development (HUD)flagshipOthersFHA operates as a division of HUD, with the FHA Commissioner serving as Assistant Secretary for Housing. HUD provides oversight and policy direction.

Scale indicators10 records

Recent moves6 records

Expansion highlights5 records

Direct peers

• NewRez (now part of Rocket): NewRez is a major FHA-approved mortgage originator and servicer (now operating under Rocket). Compares as a top participant in FHA-insured origination and special servicing.
• PennyMac Loan Services: PennyMac is a major FHA-approved lender and the largest U.S. mortgage servicer, focused heavily on Ginnie Mae-eligible (predominantly FHA) loan servicing. Compares as a leading counterparty for FHA origination and servicing.
• Rocket Mortgage: Rocket Mortgage is the largest U.S. retail mortgage originator and a top FHA-approved lender, channeling FHA-insured loans to consumers. Compares as the most prominent distribution counterparty for FHA products and a peer in FHA loan origination volume.
• United Wholesale Mortgage: UWM is the largest U.S. wholesale mortgage lender and a major FHA-approved originator. Compares as a leading originator and distribution counterparty for FHA-insured single-family loans, with similar broker-driven GTM.
• loanDepot: loanDepot is a top-tier U.S. mortgage originator with significant FHA loan volume across retail and wholesale channels. Compares as a direct distribution participant in the FHA-insured mortgage market.
• USDA Rural Development Single Family Housing: USDA Rural Development provides government-backed mortgage guarantees for rural and low-income borrowers, with structure and target borrower profile closely parallel to FHA. Compares as another federally sponsored affordable mortgage program in the U.S. housing finance stack.
• Ginnie Mae: Ginnie Mae is FHA's sister agency under HUD, guaranteeing mortgage-backed securities backed principally by FHA-insured loans. Both are federal mortgage credit programs operating under federal authority and serve overlapping lender and capital markets participants.
• Fannie Mae: Fannie Mae is a government-sponsored enterprise providing credit enhancements for residential mortgages, jointly accepting VantageScore 4.0 and FICO 10T with FHA. Like FHA, Fannie Mae is a foundational component of the U.S. housing finance system serving first-time and moderate-income buyers.
• Freddie Mac: Freddie Mac is the other primary GSE providing mortgage credit guarantees, and is participating in the VantageScore 4.0 pilot with FHA. Its mission, customer base (lenders and borrowers), and secondary-market execution role directly parallel FHA's insurance function.
• VA Home Loans (U.S. Department of Veterans Affairs): VA Home Loans is a federal mortgage guarantee program for veterans, operating analogously to FHA with government-backed mortgage insurance and similar low/no down payment features. Comparable as a federal mortgage credit guarantor serving underserved borrower populations.

Market position

Strengths5 records

Weaknesses5 records

Competitive moat5 records

Key risks5 records

Key highlights7 records

Customer concentration

Revenue estimate

Valuation estimate

Number of profiles

Profiles1 record

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about Federal Housing Administration