August 5, 2021

MP Now News

Mortgage News

Looking for a bargain on your next home? Try HUD

Gary Sandler

Before the Great Depression of the 1930s, getting a mortgage was a challenging task. Down payments were usually 50 percent of the purchase price, loan terms rarely exceeded 10 years and balloon payments were the order of the day. It was only with the passage of the Federal Home Loan Bank Act of 1932 that the mortgages we take for granted today emerged under President Roosevelt’s New Deal. The Federal Housing Administration was founded two years later.

The FHA’s mission is to insure FHA loan lenders against losses they might suffer in the event of a borrower’s default.

“FHA insurance added security to lenders and expanded the pool of potential homebuyers for whom lenders were willing to borrow” History of the state-sponsored companies of the Federal Housing Agency. In reality, FHA has grown to become the world’s largest mortgage insurance company.