Which agency is responsible for insuring mortgages in the United States?

The Federal Housing Administration (FHA) is the correct answer because it is specifically tasked with insuring mortgages in the United States. The FHA was established to provide insurance on loans made by approved lenders to borrowers with low to moderate incomes, thereby lowering the risk for lenders and making home ownership more accessible. When lenders offer FHA-insured loans, they have the backing of the federal government, which protects them in case of borrower default.

In contrast, the other agencies mentioned play different roles in the housing finance market. The Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, primarily buys and securitizes mortgages to enhance liquidity in the mortgage market rather than providing mortgage insurance. The Federal Deposit Insurance Corporation protects depositors by insuring deposits at banks and thrift institutions but does not insure mortgages. Similarly, the Federal National Mortgage Association, or Fannie Mae, functions to promote home ownership by buying and selling mortgages but is not involved in offering direct mortgage insurance. Thus, the FHA's specific role in providing insurance for mortgages makes it the correct choice in this context.