Which mortgage type is insured by the Federal Housing Administration (FHA)?

The Federal Housing Administration (FHA) specifically insures loans that are designed to help low to moderate-income borrowers obtain a mortgage. An FHA loan is crafted with flexible underwriting standards and lower down payment requirements, making it an accessible option for many first-time homebuyers. This type of loan is characterized by its backing from the FHA, which provides lenders with a level of security against losses if the borrower defaults.

In contrast, other types of loans listed, such as conventional, VA, and USDA loans, do not have the same insurance backing from the FHA. Conventional mortgages are typically not insured or guaranteed by any government agency, leaving the lender to bear the risk. VA loans are specifically for veterans and utilize guarantees from the Department of Veterans Affairs rather than the FHA, while USDA loans are aimed at rural development and are insured by the United States Department of Agriculture. Therefore, the FHA loan stands out as the option that is insured by the Federal Housing Administration, making it the correct answer.