Which government agency insures FHA loans?

The Federal Reserve (A) is incorrect as it is the central banking system of the United States, responsible for monetary policy and regulating banks, not insuring specific mortgage products. It does not directly participate in mortgage insurance programs.

Fannie Mae (C) is incorrect because it is a government-sponsored enterprise that purchases mortgages from lenders, securitizes them, and sells them as mortgage-backed securities, rather than directly insuring loans like FHA does.

The Veterans Administration (D) is incorrect as it specifically guarantees loans for eligible veterans and active-duty service members through the VA loan program, which is distinct from the FHA loan program that insures loans for broader qualifying borrowers.