National Housing Act

What is ‘National Housing Act’

Federal legislation passed in 1934 to create the Federal Housing Administration (FHA). Its purpose is to make credit more available to lenders for home repairs and construction and to make better housing available to low- and moderate-income families. The National Housing Act also led to the 1937 creation of Fannie Mae, a national mortgage association that provides a secondary mortgage market and further improves the availability of loan money.

Explaining ‘National Housing Act’

To this day, the FHA plays a major role in making home ownership a possibility for greater numbers of people. For example, it facilitates mortgages with down payments as low as 3.5% instead of the 20% traditionally required by conventional lenders. Its lending guidelines also allow banks to consider an applicant’s whole financial picture instead of relying solely on strict guidelines and formulas.

Further Reading

  • European competition policy and national housing policies: International implications of the Dutch case – [PDF]
  • A New Deal for the American Mortgage: The Home Owners' Loan Corporation, the National Housing Act and the Birth of the National Mortgage Market – [PDF]
  • The troubled dream: The life and times of Section 235 of the National Housing Act – [PDF]
  • The trajectory of social housing policy in Brazil: From the National Housing Bank to the Ministry of the Cities – [PDF]
  • Section 235 of the National Housing Act; Homeownership for Low Income Families – [PDF]
  • European policy and national housing systems – [PDF]