What is one of the roles of the Federal Housing Administration?

One of the primary roles of the Federal Housing Administration (FHA) is to insure loans. This function is crucial in the mortgage market as it helps to protect lenders against losses that may occur if a borrower defaults on their home loan. When the FHA insures a loan, it provides a safety net for lenders, allowing them to offer more favorable terms to borrowers, such as lower down payments and more accessible credit qualifications. This insurance encourages lenders to make loans to borrowers who might otherwise struggle to obtain financing, thereby promoting homeownership and enhancing stability in the housing market.

In contrast, the other options do not accurately represent the FHA's functions. The FHA does not provide direct funding for homebuyers; instead, it supports lenders by insuring loans. It also does not set interest rates for mortgages, as these are influenced by the broader market and individual lender policies. Additionally, overseeing real estate agents falls outside its jurisdiction, as the FHA focuses specifically on housing finance and loan insurance rather than on the regulation of real estate professionals.