Which of the following best describes a primary function of the FHA?

The primary function of the Federal Housing Administration (FHA) is to insure loans made by approved lenders. This means that the FHA provides a guarantee to lenders that they will be compensated for losses if a borrower defaults on their mortgage. By offering this insurance, the FHA encourages lenders to extend credit to borrowers who might otherwise be considered high-risk, particularly first-time homebuyers and those with lower credit scores. This insurance helps lower the overall risk for lenders, enabling them to offer loans with more favorable terms, such as lower down payments, which can facilitate homeownership opportunities for a broader range of individuals.

The other options refer to services or actions that are either ancillary to the FHA's primary function or not within its scope. For example, the provision of low-interest loans, management of foreclosure operations, and offering grants are not direct responsibilities of the FHA. Instead, the FHA focuses specifically on insuring loans to promote access to affordable housing.