Final answer:
The statement that the FHA helps low and moderate income borrowers to become eligible for FHA insured mortgage loans is not entirely accurate; while it insures loans, it doesn’t directly assist in eligibility. The FHA's role is more focused on reducing lender risk.
Step-by-step explanation:
All of the following statements about the FHA are accurate, EXCEPT: c. FHA helps low and moderate income borrowers to become eligible for FHA insured mortgage loans.
This statement is not accurate as FHA does not directly help borrowers become eligible; rather, it insures the loans to reduce the risk for lenders, which can result in lenders being more willing to make loans to low and moderate income borrowers.
The FHA, or Federal Housing Administration, is indeed part of the Department of Housing and Urban Development (HUD), and it plays a significant role in the mortgage industry by insuring residential mortgages.
This insurance makes it less risky for lenders such as mortgage companies, banks, and savings and loan associations to offer loans to borrowers who might not qualify for conventional loans.
The FHA was created in 1934 and has impacted homeownership rates in the United States. While it did increase overall homeownership, it also unintentionally contributed to discriminatory practices like redlining due to its criteria for insuring mortgages, which often excluded minorities.
Thus, while the FHA's policies have helped increase homeownership among certain sections of the population, it is also associated with policies that have had mixed effects on different racial and economic groups within the United States.