Editing Federal Housing Administration (section)

==Legacy==
The establishment of the Federal Housing Administration (FHA) had a significant impact on the housing market in the United States. Homeownership rates experienced a notable increase, rising from 40% in the 1930s to 61% and 65% by 1995. The peak of homeownership was nearly 69% in 2005, coinciding with the height of the US housing bubble. Within just four years of the FHA's inception in 1934, prospective homeowners could secure a house with a mere ten percent down payment, with the remaining ninety percent financed through a 25-year, self-amortizing, FHA-insured mortgage loan.

Following [[World War&nbsp;II]], the FHA played a pivotal role in financing homes for returning white veterans and the families of white soldiers. Its assistance extended to the purchase of both single-family and multifamily homes. During the 1950s, 1960s, and 1970s, the FHA played a crucial role in catalyzing the construction of millions of privately owned apartments designed for elderly, handicapped, and lower-income Americans. In the 1970s, amid soaring inflation and energy costs that threatened the viability of numerous private apartment buildings, the FHA's emergency financing provided essential support to financially struggling properties. Additionally, during the 1980s, when economic conditions did not favor increased homeownership, the FHA helped stabilize falling property prices, enabling potential homeowners to secure financing, especially in regions where private mortgage insurers had withdrawn due to economic challenges, such as oil-producing states.<ref name=FHA_history>{{cite web |url=http://www.hud.gov/offices/hsg/fhahistory.cfm |title=HUD – Federal Housing Administration |date=September 6, 2006 |location=Washington, D.C. |access-date=December 10, 2009 |publisher=[[U.S. Department of Housing and Urban Development]] |archive-url=https://web.archive.org/web/20100105123839/http://www.hud.gov/offices/hsg/fhahistory.cfm |archive-date=January 5, 2010 |url-status=dead }}</ref>{{Failed verification|date=December 2009}} The Federal Housing Administration (FHA) has had its most pronounced impact on minority populations and urban areas. In particular, nearly half of the FHA's business in metropolitan areas is concentrated in central cities, a significantly higher proportion than that observed with conventional loans.<ref name="monroe">Monroe, Albert. [http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/monroe_w02-4.pdf "How the Federal Housing Administration Affects Homeownership."] [[Harvard University]] Department of Economics. [[Cambridge, MA|Cambridge]], MA. November 2001.</ref> The FHA has also extended loans to a larger proportion of [[African American]]s, [[Hispanic and Latino Americans|Hispanic Americans]], as well as younger borrowers with limited credit, playing a role in the growth of homeownership within these demographic groups. However, as the capital markets in the United States evolved over the course of several decades, the influence of the FHA waned. By 2006, FHA loans constituted less than 3% of all loans originated in the United States.<ref>{{Cite web |last=Elboghdady |first=Dina |title=The FHA's balancing act |url=https://www.washingtonpost.com/wp-srv/business/fha-loan-modifications/ |access-date=May 9, 2022 |website=washingtonpost.com}}</ref> In the fiscal year 2019, FHA-insured mortgages represented 11.41% of the total dollar volume for single-family residential mortgage originations. Notably, 82.84% of these FHA-insured single-family forward purchase transaction mortgages in fiscal year 2019 were availed by first-time homebuyers. Furthermore, minorities accounted for 36.24% of FHA purchase mortgage borrowers in the calendar year 2018, a significant contrast to the 19.94% observed through conventional lending channels.<ref>{{cite web |title=Annual Report Fiscal Year 2019 |url=https://archives.hud.gov/news/2019/2019FHAAnnualReportMMIFund.pdf |website=archives.hud.gov |page=13}}</ref>

===Redlining===
{{Main|Redlining}}

The Federal Housing Administration (FHA) implemented [[mortgage underwriting]] standards that had a discriminatory impact on minority neighborhoods. This discriminatory practice is evident in the fact that between 1945 and 1959, African Americans received less than 2 percent of all federally insured home loans.<ref name="Hanlon">{{cite book |last1=Hanlon |first1=Bernadette |last2=Short |first2=John Rennie |editor1-last=Anacker |editor1-first=Katrin B. |editor2-last=Nguyen |editor2-first=Mai Thi |editor3-last=Varady |editor3-first=David P. |display-editors=1 |title=The Routledge Handbook of Housing Policy and Planning |date=2020 |publisher=Routledge |location=New York |isbn=978-1-1381-8843-3 |chapter=Housing Policy and the Suburban Metropolis: A Focus on the United States and France}}</ref><ref name="Hanchett">{{cite book |last=Hanchett |first=Thomas W. |chapter=The Other 'Subsidized Housing': Federal Aid to Suburbanization 1940s-1960s |editor1-first=John F. |editor1-last=Bauman |editor2-first=Roger |editor2-last=Biles |editor3-first=Kristin M. |editor3-last=Szylvian |display-editors=1 |title=From Tenements to the Taylor Homes: In Search of an Urban Housing Policy in Twentieth Century America |publisher=Pennsylvania State University Press |year=2000 |pages=163–179 |isbn=0-2710-2012-1}}{{page range too broad|date=May 2021}}</ref> As subsidized mortgage insurance became increasingly significant in the housing market, property values in minority neighborhoods within inner cities experienced a sharp decline. Additionally, approval rates for mortgage loans among minority applicants remained exceedingly low. Beginning in 1935, the FHA instituted guidelines designed to discourage private mortgage investors from extending loans to properties in minority areas. This practice, known as [[redlining]], was made illegal by the [[Fair Housing Act|Fair Housing Act of 1968]].<ref>{{cite web |url=http://www.louisianaweekly.com/housing-discrimination-underpins-the-staggering-wealth-gap-between-blacks-and-whites/ |title= Housing discrimination underpins the staggering wealth gap between Blacks and whites |date=April 15, 2019 |website=www.louisianaweekly.com|access-date=January 19, 2021}}</ref> Redlining has had long-lasting effects on minority communities.<ref>{{cite web|first=Amy|last=Hillier|url=http://cml.upenn.edu/redlining/intro.html|archive-url=https://web.archive.org/web/20070303103013/http://cml.upenn.edu/redlining/intro.html|title=Redlining in Philadelphia|archive-date=March 3, 2007|website=Cartographic Modeling Laboratory|publisher=[[University of Pennsylvania]]}}</ref><ref>{{cite magazine|url=https://www.theatlantic.com/features/archive/2014/05/the-case-for-reparations/361631/|title=The Case for Reparations|first=Ta-Nehisi|last=Coates|magazine=[[The Atlantic]]|date=June 2014}}</ref> The legacy of redlining continues to exert its influence today in certain regions of the United States. Redlining has had a detrimental impact on the contemporary [[wealth gap]] between African Americans and White Americans.<ref name=":0">{{cite web |date=April 15, 2019 |title=Housing discrimination underpins the staggering wealth gap between Blacks and whites |url=http://www.louisianaweekly.com/housing-discrimination-underpins-the-staggering-wealth-gap-between-blacks-and-whites/ |access-date=January 19, 2021 |website=www.louisianaweekly.com}}</ref>