What is the primary function of the FHA?

The Federal Housing Administration (FHA) primarily functions to insure loans made by approved lenders to borrowers, particularly those with lower income or less-than-perfect credit. This insurance reduces the lender's risk, as the FHA promises to repay a portion of the loan if the borrower defaults. By providing this safety net for lenders, the FHA encourages them to extend credit to a broader range of homebuyers, thereby increasing access to home ownership.

In the context of the other options, while the FHA does indirectly support low-income families by facilitating their access to loans, it does not directly provide housing or offer grants. Additionally, the FHA is not responsible for regulating mortgage interest rates; those rates are influenced by broader economic factors and market conditions. Therefore, the primary role of the FHA centers around insuring loans, making option B the correct choice.