Federal Home Loan Bank Act

DEFINITION of 'Federal Home Loan Bank Act'

An act passed by the Hoover administration in 1932 that was designed to encourage home ownership by providing a source of low-cost funds for member banks to extend mortgage loans. The Federal Home Loan Bank Act was the first in a series of bills that sought to make home ownership an achievable goal for more Americans.

BREAKING DOWN 'Federal Home Loan Bank Act'

Proponents of these measures argue that home ownership is an essential part of the American dream and that home ownership results in stronger local communities and a higher overall quality of living. However, critics claim that this long tradition of federal subsidies for mortgage loans distorted the housing market, culminating in overly lax lending standards and unnaturally high housing prices.

RELATED TERMS
  1. Home-Equity Loan

    A consumer loan secured by a second mortgage, allowing home owners ...
  2. Home Equity

    The value of ownership built up in a home or property that represents ...
  3. Combination Loan

    1. A transaction consisting of two separate loans for the same ...
  4. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against ...
  5. High Ratio Loan

    A loan of any type for which a relatively small down payment ...
  6. Home Debtor

    An individual who holds a large mortgage with little or no equity ...
Related Articles
  1. Retirement

    5 Signs a Reverse Mortgage Is a Bad Idea

    Here are the key situations when you should probably pass on this type of home loan.
  2. Personal Finance

    The Smartest Way to Tap Your Home Equity

    Using your home as a source of funds can be a smart choice in some situations. Just be sure to carefully run the numbers.
  3. Personal Finance

    How To Afford A Second Home

    Buying a second home, even if it’s relatively affordable, takes careful budgeting and planning. Here's how to do it.
  4. Personal Finance

    Financing Basics For First-Time Homebuyers

    If you're looking to get your first mortgage, there are many financing options available.
  5. Personal Finance

    Why Home Ownership Is Still A Good Idea

    Owning a home is still a good decision for many people and can be an important part of a long-term financial strategy.
  6. Personal Finance

    How To Afford A Second Home

    Saving enough to buy a vacation home involves some unique considerations including a big down payment and more lending hurdles.
  7. Retirement

    Reverse Mortgage Pros And Cons

    It's a way to use your home equity for help when you're older. But does it make sense for your family? Here's how to tell and how to protect your spouse.
  8. Personal Finance

    Measuring The Benefits Of Home Ownership

    Price appreciation is the biggest factor, but it's not the only thing to consider.
  9. Markets

    Is Now the Right Time to Buy a House?

    Thinking of buying a home? Consider these factors first.
  10. Personal Finance

    5 Ways Overvaluing Your Home Can Hurt You

    Getting top dollar for your home is everyone's goal, but overvaluing your home can hurt its chances of being sold.
RELATED FAQS
  1. How does the loan-to-value ratio affect my mortgage payments?

    Understand what the loan to value ratio is, how the ratio is calculated and learn how it has an impact on your mortgage payments ... Read Answer >>
  2. What are the differences between a home equity line of credit (HELOC) and a home ...

    Learn the differences between a home equity loan and a home equity line of credit, and find out how to select the one that ... Read Answer >>
  3. How many years after the sale of a home must pass before you are considered to be ...

  4. When buying a new home, will my current mortgage count towards my debt to income ...

    I am currently looking to upgrade from my starter home to a larger home. Upon purchasing the next home, I intend it to be ... Read Answer >>
  5. What are the requirements to apply for a reverse mortgage loan?

    For homeowners of a certain age who wish to stay in their homes but are finding it costly, a reverse mortgage could be the ... Read Answer >>
  6. Which loan should I pay off first?

    I have a $33,000 mortgage at 4.5% interest due in June 2019. I also have $627 in monthly car loan payments for loans that ... Read Answer >>
Trading Center