FHA vs HUD: Difference and Comparison

There are many federal government programs for loans for would-be homeowners with below-average credit scores, as well as for the large down payment that lacks cash.

The motto is for homeownership and particularly for low-income Americans. It might be a willing mortgage Guarantee through home loan programs.  

In simple words, promises are made to the lender by the government to make good on the loan.

Several federal agencies provide mortgage lending programs for Americans, such as FHA (Federal Housing Administration) and HUD (Department of Housing and Urban Development).

In this article, the main focus is on differentiating FHA and HUD. 

Key Takeaways

  1. Federal Housing Administration (FHA) loans are government-backed mortgages for low-to-moderate-income borrowers. At the same time, the US Department of Housing and Urban Development (HUD) is a government agency that oversees housing programs, including FHA loans.
  2. FHA loans have more lenient credit and down payment requirements than conventional ones, making homeownership more accessible for first-time homebuyers.
  3. HUD oversees public housing, housing vouchers, and other programs to improve housing affordability, safety, and quality for low-income individuals and families.


The difference between FHA and HUD is their formation. FHA was created as a section of the Act, namely the National Housing Act. Meanwhile, the HUD was established after the act became law, namely the Department of Housing and Urban Development Act. 


The FHA is also called the Office of Housing within the HUD. It was founded by the President, namely Franklin Delano Roosevelt, in the United States government.

It ensures mortgages made by multifamily rental properties, residential care facilities, hospitals, and private lenders for properties of single-family. 

The mandate of HUD is to oversee several Federal Housing programs to promote equal and fair housing. It primarily supports homeownership and community development through several initiatives.

HUD enforces the Fair Housing Act and also offers housing assistance through the CDBG. 

Comparison Table

Parameters of ComparisonFHAHUD
EstablishedIn 1934In 1965
AvailabilityNative AmericansBorrowers with below-average credit scores
Works withIndividual buyersMultifamily and commercial housing buyers
Separate inspection programDoes not have Have
LimitationsFewer lenders offer section 184 loans and borrowers pay the mortgage insurance.Be appraised by an FHA-approved appraiser and meet minimum property standards.

What is FHA?  

An FHA is a mortgage that is issued by an approved lender of the FHA and insured by the FHA. Its loans are mainly designed for borrowers with low to moderate income.

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They require a lower credit score and minimum down payment than many conventional loans.  

With the loans provided by FHA, the down payment comes from the grant for down payment assistance, savings, and a financial gift given by a family member.

It is vital to note that with the help of an FHA loan, the FHA does not lend money for a mortgage.  

Meanwhile, a loan is given from an approved lender FHA, a bank or just another institution related to finance. But the loan is guaranteed by the FHA.

For that reason, some of the people referred to this as an insured loan offered by FHA.  

To secure the FHA guarantee, borrowers, after qualifying for a loan from FHA, also needed to purchase insurance for a mortgage and premium payments made to FHA. Lender bears less risk due to the reason FHA pay a claim to the lender in case of default on the loan. 

What is HUD?  

The abbreviation for the Department of Housing and Urban Development is HUD. It is a US government agency which is created in 1965 as a part of the president, namely Lydonson’s Great Society.

The agenda of this agency is to expand the welfare state of America.  

The chief mission of HUD is to improve affordable homeownership opportunities for supporting the housing market as well as homeownership in the areas of the inner city. The program of HUD is geared toward increasing affordable and safe rental options.  

It reduces fighting housing discrimination and chronic homelessness by ensuring equal opportunities in the purchase and rental market and giving support to vulnerable populations.

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It enforces the Act of Fair Housing and oversees the program of Housing Choice Voucher as well as the Community Development Block Grant.   

HUD also supervises other programs for assisting disadvantaged and low-income Americans with their needs for housing.

It works with several private organizations and government agencies consisting of community faith-based and nonprofit groups to reach its goal. 

Main Differences Between FHA and HUD 

  1. FHA was formed as a section of the Act, namely the National Housing Act. On the other hand, the HUD was formed after the act became law, namely the Department of Housing and Urban Development Act.  
  2. Regarding mortgages, FHA ensures homebuyers’ mortgages with limited cash amounts for a down payment and lower credit scores than average. Conversely, HUD does not guarantee individual home mortgages unless you are a Native American.  
  3. In terms of agency executives, the Principal Deputy Assistant Secretary is Lopa Kolluri for the Office of Housing and the Federal Housing Administration. In contrast, Marcia Fudge is the secretary, and Adrianne Todman is the Deputy Secretary of HUD.  
  4. The pros of FHA loans are that they are assumable, which means whoever buys the property that belongs to you can take it over from you. Meanwhile, qualification requirements are more flexible compared to traditional loans is the pros of HUD loans.  
  5. FHA deals with residential lending for primary residencies. On the flip side, HUD oversees multifamily as well as residential insurance programs. 
  1. https://direct.mit.edu/rest/article-abstract/80/2/241/57067
  2. http://fcic-static.law.stanford.edu/cdn_media/fcic-docs/2008-06-10%20Washington%20Post%20How%20HUD%20Policy.pdf

Last Updated : 13 July, 2023

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6 thoughts on “FHA vs HUD: Difference and Comparison”

  1. The discussion of the differences between FHA and HUD is quite interesting, and the article effectively highlights the benefits of both programs.

  2. This article does a great job at presenting a comparison between FHA and HUD loans, showcasing the differences and similarities clearly.

  3. The detailed comparison table is quite informative and helps in understanding the contrasts between FHA and HUD programs.

  4. The article’s explanation of the formation of both FHA and HUD, along with their mandates, provides a comprehensive overview of these government programs.


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