### What does the Farmer's Home Administration (FHA) under the US Department of Agriculture aim to provide? - [ ] High-interest loans for luxury properties - [ ] State-sponsored mortgage protection plans - [x] Financing assistance to make home ownership possible for more people - [ ] Training for prospective farmers > **Explanation:** The FHA helps provide financing assistance to make home ownership possible for more people, especially those who may not qualify for traditional loan programs. It aims to make loans affordable to farmers and other potential homeowners. ### What is one of the defining features of FHA loans that benefits potential homeowners? - [ ] High down payment requirements of 20% - [x] Low down payment requirement of 3.5% - [ ] Requirement of a co-signer - [ ] Necessity of having no prior loans > **Explanation:** One of the defining features of FHA loans is the low down payment requirement of 3.5%, which is designed to make home ownership more accessible for people who might struggle with larger down payments. ### What is the main role of the insurance provided by FHA loans? - [ ] To ensure private insurance companies' profits - [x] To protect lenders from the risk of borrower default - [ ] To offer health insurance to borrowers - [ ] To provide insurance specifically for expensive properties > **Explanation:** The insurance provided by FHA loans protects lenders from the risk of borrower default. This helps lenders relax qualifications, thereby allowing more people to access mortgage loans. ### Can FHA loans be used for properties other than single-family homes? - [x] Yes, they can be used for owner-occupied multiple unit properties - [ ] No, they can only be used for single-family homes - [ ] Yes, but only for commercial properties - [ ] No, they are limited to agricultural investments > **Explanation:** FHA loans are not limited to single-family homes. They can also be used for owner-occupied multiple unit properties, expanding the scope of its assistance to other types of residential properties. ### What must buyers have to qualify for an FHA loan? - [ ] Major credit delinquencies - [ ] No down payment - [ ] Luxurious homes as collateral - [x] No major credit delinquencies > **Explanation:** To qualify for an FHA loan, buyers must have no major credit delinquencies. This makes it easier for individuals with less-than-perfect credit histories to still access loans for home ownership. ### Where does the FHA insurance come from? - [ ] A family member's contribution - [ ] A state government fund - [x] The monthly mortgage insurance premium paid by the buyer - [ ] A separate insurance policy taken out by the lender > **Explanation:** FHA insurance is funded by the monthly mortgage insurance premiums paid by the buyer, which protects the lender from foreclosure losses. ### Who can give buyers the down payment needed for an FHA loan? - [ ] Only the buyer's employer - [x] A family member - [ ] The U.S. Department of Agriculture - [ ] Real estate agents > **Explanation:** The down payment in an FHA loan, which is often very low at 3.5%, can be gifted from a family member. This flexibility further assists potential homeowners in securing finance. ### When was the Farmer's Home Administration originally formed? - [x] After the Great Depression - [ ] During World War II - [ ] In the 1990s - [ ] In the early 2000s > **Explanation:** The FHA was created after the Great Depression to provide loans to farmers and homeowners who were struggling to qualify for traditional loan programs during that difficult time. ### What premium do FHA loans include to protect lenders from foreclosure losses? - [ ] Annual homeowner payment - [x] Monthly mortgage insurance premium - [ ] One-time insurance fee - [ ] Non-refundable service charge > **Explanation:** FHA loans include a monthly mortgage insurance premium that protects lenders from foreclosure losses, which lowers the risk for lenders and allows them to offer more favorable terms. ### Which of the following best describes the FHA's historical contribution? - [ ] Exclusive to urban properties - [ ] Created for luxury home purchases - [x] Provided affordable loans to farmers and potential homeowners during tough economic times - [ ] Focused only on commercial real estate development > **Explanation:** Historically, the FHA was created to provide affordable loans to farmers and potential homeowners during tough economic times, especially after the Great Depression, enabling more people to secure home ownership.