Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development's (HUD) Office of Housing in 1965.
When the FHA was created, the housing industry was flat on its back:
- Two million construction workers had lost their jobs.
- Terms were difficult to meet for homebuyers seeking mortgages.
- Mortgage loan terms were limited to 50 percent of the property's market value, with a repayment schedule spread over 3 to 5 years and ending with a balloon payment.
- America was primarily a nation of renters. Only 2 in 5 households owned homes.
During the 1940's, FHA programs helped finance military housing and homes for returning veterans and their families after the war.
FHA moved in to steady falling home prices and made it possible for potential homebuyers to get the financing they needed when recession prompted private mortgage insurers to pull out of oil producing states in the 1980s.
By 2001, the nation's homeownership rate had soared to an all time high of 68.1 percent as of the third quarter that year.
Currently FHA has 4.8 million insured single family mortgages and 13,000 insured multifamily projects in its portfolio.
In the more than 60 years since the FHA was created, much has changed and Americans are now arguably the best housed people in the world. HUD has helped greatly with that success.
For more information get a free copy of the "Homebuyer's Handbook", it will greatly help you understand the entire process for purchasing a home.
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