Which statement about FHA-insured loans is false?

Among the statements regarding FHA-insured loans, indicating that U.S. citizenship is required is indeed false. While FHA loans are designed to assist a broad range of homebuyers, including those who may not be citizens, they can also be available to certain non-citizen residents, such as permanent residents or those with qualifying visa status.

The other statements reflect accurate aspects of FHA-insured loans. FHA loans generally do require a larger down payment compared to VA loans, which are available to eligible veterans and do not mandate a down payment in many instances. Additionally, it is true that prepayment penalties are prohibited in FHA-insured loans, allowing borrowers the flexibility to pay off their loan early without incurring additional costs. Moreover, the lender origination fee being capped at one point aligns with regulatory measures to keep borrowing costs reasonable for consumers. All these factors contribute to why the statement about citizenship is not a requirement and is deemed false.