FHA is not an originator of what type of loans?

The correct answer is that FHA does not originate primary loans. The Federal Housing Administration (FHA) primarily operates as an insurer rather than a lender. Its primary role is to provide mortgage insurance on loans made by approved lenders, allowing borrowers to access loans with lower down payments and more favorable terms.

The FHA insures loans that are offered by private lenders, which means that these loans are often considered secondary or government-backed loans because the lenders take less risk due to the insurance provided by FHA. In contrast, primary loans come directly from financial institutions or banks that originate the loans themselves without the involvement of government entities like the FHA.

While FHA is involved in the securing of loans for properties that are intended for personal occupancy, it does not engage in the direct origination of those primary loans. Instead, its focus is on supporting lending by reducing risk for lenders, encouraging them to provide financing to a more extensive range of homebuyers.

On the other hand, commercial loans and student loans, while they may have governmental or institutional support, are distinct from the residential mortgage insurance programs offered by FHA. The FHA's mission is primarily centered on creating accessible homeownership opportunities, which does not extend to loans that are not tied to residential properties.