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Message from the Acting Assistant Secretary Helping low- and moderate-income and minority families achieve successful homeownership has always been a core goal of the U.S. Department of Housing and Urban Development. As the lead article in this issue of Evidence Matters attests, many HUD programs support homeownership for low-income and low-wealth families and individuals through down payment assistance, counseling, and other activities. But no part of our agency has been more central to this goal — and to the broader goal of stabilizing the housing market — than the Federal Housing Administration (FHA).
FHA was established in 1934 to help stabilize a housing market disrupted by the Great Depression and make home financing attainable for a much larger share of American families. FHA helped end the Depression by providing market liquidity and stimulating housing construction. A hallmark of FHA’s early years was demonstrating the market viability of the long-term, fixed-rate mortgage, which soon became the market standard. It continues to be an important source of capital that increases lending to low-wealth but creditworthy borrowers, including those with higher risk characteristics who are priced out of the conventional market. By the 1950s, FHA demonstrated the feasibility of providing high loan-to-value and low down payment loans by maintaining sound underwriting and appraisal standards. FHA loans have been especially helpful in supporting homeownership for low-wealth, first-time, and minority buyers. FULL MESSAGE |
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