Where should an agent refer a potential buyer interested in obtaining an FHA loan?

An agent should refer a potential buyer interested in obtaining an FHA loan to a local lending institution because these institutions have the specific resources and expertise necessary to assist borrowers with FHA loan applications. Local lending institutions are familiar with the requirements, processes, and recent changes in FHA guidelines, allowing them to provide tailored advice and assistance. They are well-equipped to help buyers navigate the loan process, evaluate their financial situation, and understand the benefits and potential challenges associated with FHA loans.

In comparison, while financial advisors can offer general financial advice, they may not have the specialized knowledge required for real estate financing and specific loan products like FHA loans. Referring to a real estate broker may also not be as effective since brokers focus more on property transactions rather than financing options. Directing potential buyers to a neighboring state agency would be inappropriate and ineffective, as housing finance regulations and opportunities can vary significantly from one state to another. A local lending institution is the most appropriate and practical option for this scenario.