The FHA functions MOST like which type of organization?

The Federal Housing Administration (FHA) functions most like an insurance company because it provides mortgage insurance on loans made by approved lenders to borrowers with low to moderate incomes. This insurance protects lenders from losses in case of borrower default. The FHA does not lend money directly but acts as a guarantor for loans, which encourages lenders to offer loans to individuals who might not qualify for conventional financing.

By providing this insurance, the FHA helps to stabilize the housing market and increase home ownership rates among lower-income households. This is similar to how an insurance company mitigates risk and provides security to clients. The focus on risk management and financial support aligns the FHA's role more closely with that of an insurance company rather than the other choices, which involve different responsibilities and functions in real estate and finance.

Investment banks primarily facilitate capital raising and financial transactions, real estate brokerages are transactional entities focused on buying and selling properties, and mortgage lenders provide the actual loans rather than insurance for those loans.