Which of the following statements is true about the Federal Housing Administration?

The Federal Housing Administration (FHA) primarily serves to safeguard lenders against nonpayment risk by providing insurance on mortgages. This insurance allows lenders to offer loans with lower down payments and more flexible credit requirements, which in turn helps to make homeownership more accessible to a broader range of individuals. When a borrower defaults on an FHA-insured mortgage, the FHA compensates the lender for the loss, thereby reducing the financial risk associated with lending.

The other statements are not accurate in the context of the FHA's functions. The FHA is not an independent federal entity; rather, it operates as part of the U.S. Department of Housing and Urban Development (HUD). It does not directly issue mortgages; instead, it insures mortgages issued by approved lenders. Additionally, the FHA's involvement is crucial in promoting homeownership, as its insurance programs enable lenders to provide loans to borrowers who may not qualify under conventional lending standards.