Final answer:
False. The correct statement is that the Federal Housing Administration (FHA) insures lenders against loss due to foreclosure of FHA loans.
Step-by-step explanation:
False. The correct statement is that the Federal Housing Administration (FHA) insures lenders against loss due to foreclosure of FHA loans. The FHA is a federal program that was created as part of Franklin D. Roosevelt's New Deal in 1934. It aims to encourage banks to provide affordable loans for homebuyers and ensure that housing meets safety standards. By insuring lenders against loss, the FHA reduces the risk for lenders, which encourages them to offer loans to borrowers who may not otherwise qualify. This helps to promote homeownership and stimulate the housing sector of the economy. However, it is important to note that the FHA's policies have faced criticism for their impact on residential segregation and discriminatory practices.