What role does the Federal Housing Finance Administration (FHFA) NOT play?

The Federal Housing Finance Administration (FHFA) does not fund the Federal Housing Administration (FHA) loan program, which is why this choice is correct. The FHFA primarily regulates and oversees government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac and also supervises the Federal Home Loan Banks. Its main responsibilities include ensuring the operational stability and ethical conduct of these entities, but it does not have a role in funding FHA loans.

The FHA operates as part of the Department of Housing and Urban Development (HUD) and provides mortgage insurance on loans made by approved lenders, which is separate from the functions of the FHFA. The funding for FHA loans comes from various sources, including premiums paid by borrowers, not the FHFA.

The other statements accurately describe the roles of the FHFA, as it is indeed responsible for overseeing Fannie Mae and Freddie Mac and the Federal Home Loan Banks, and it was established as an independent federal agency to provide regulation and stability within the housing finance system.