National Housing Act

AAA

DEFINITION of '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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  1. Mutual Mortgage Insurance Fund

    A fund that insures mortgages made by the Federal Housing Administration ...
  2. Federal Housing Finance Agency ...

    A U.S. government agency created by the Housing and Economic ...
  3. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  4. Secondary Mortgage Market

    The market where mortgage loans and servicing rights are bought ...
  5. Fannie Mae - Federal National Mortgage ...

    A government-sponsored enterprise (GSE) that was created in 1938 ...
  6. Federal Home Loan Bank System - ...

    An organization created by the Federal Home Loan Bank Act of ...
Related Articles
  1. Financing Basics For First-Time Homebuyers
    Home & Auto

    Financing Basics For First-Time Homebuyers

  2. Understanding FHA Home Loans
    Retirement

    Understanding FHA Home Loans

  3. Insuring Federal Housing Authority Mortgages
    Home & Auto

    Insuring Federal Housing Authority Mortgages

  4. What You Need To Know About Fannie Mae ...
    Investing Basics

    What You Need To Know About Fannie Mae ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center