Discussion Paper

FHA lending activity in the past decade: a national overview

Abstract: The Federal Housing Administration (FHA), which provides insurance for residential mortgage loans, was established by the National Housing Act of 1934 to stimulate housing demand and, in turn, demand for those who build housing. In the housing boom after World War II, FHA loans helped make mortgage credit more widely available to returning veterans. In recent decades, the FHA, which is now part of the Department of Housing and Urban Development (HUD), has disproportionately served first-time homebuyers as well as low- and moderate-income (LMI) and minority households. The FHA allows low down payments and a low minimum credit score and requires that lenders who make FHA-insured loans carry out extensive loss mitigation efforts on seriously delinquent loans to reduce the incidence of foreclosure.

Keywords: Mortgage loans; Global financial crisis;

Bibliographic Information

Provider: Federal Reserve Bank of Philadelphia

Part of Series: Community Affairs Discussion Paper

Publication Date: 2011

Number: 11-01

Note: Authored by Community Development Studies and Education Department.