The History of the FHA

The Federal Housing Administration, usually called the FHA, was created in 1934 to help the U.S. recover from the Great Depression. The FHA became a part of the Department of Housing and Urban Development in 1965.

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The Role of the FHA
The FHA has played an important part in increasing home ownership, especially among returning World War II war veterans and their families. It has also ensured the continued available of rental housing by insuring multifamily developments.

As part of its mission, the FHA encourages the growth of the housing market and stabilizes it during difficult times. By insuring loans at low interest rates, it has helped millions of people enter the housing market. The FHA has insured more than 34 million home mortgages in its more than 70-year history.

THE FHA Through the Decades
When the FHA was established in 1934, the country was in a desperate situation. Only 40% of American families were homeowners. Extensive job losses and aggressive mortgage terms made it difficult for most families to afford a home. The FHA changed all that.

When war veterans returned from the front in the 1940s, the FHA helped them move into homes while the GI Bill helped them receive college educations.

The FHA continued to help homeowners during the next three decades, but it also helped ensure continued availability of rental housing for the poor and the elderly by insuring loans for multifamily developments. The FHA kept that industry afloat amidst the soaring interest rates of the 1970s.

The FHA again stabilized the housing market during the 1980s when recession forced lenders to pull out of oil producing states.

In the first decade of the new century, the FHA provided affordable loans to families entering a booming housing market. When the market fell, it once again met the demands of a changing housing market. An act of Congress modified lending limits and the FHA expanded its mission to include foreclosure rescue.

As the housing market and the needs of homebuyers and multifamily developers change, we can expect the FHA to continue to adapt.