The mortgage insurance premium required for an FHA-insured loan would least likely benefit which party?

The mortgage insurance premium required for an FHA-insured loan primarily serves to protect lenders in the event of a borrower defaulting on the loan. This premium is a cost incurred by the borrower, but it ultimately provides benefits to the lender by reducing their risk exposure.

When a borrower applies for FHA insurance, they pay a mortgage insurance premium (MIP), which helps cover potential losses for the lender if the borrower cannot fulfill their mortgage obligations. The FHA itself benefits from the premiums as they provide revenue that supports the insurance fund. The U.S. Department of Housing and Urban Development (HUD) oversees the FHA and benefits indirectly from the robust insurance framework that supports homeownership.

In this structure, the borrower does not receive a direct benefit from paying the mortgage insurance premium; rather, they are providing protection to the lender and contributing to the overall system set up to support affordable housing opportunities through the FHA program. Thus, the borrower is least likely to benefit from the premium, making it the correct choice in this context.