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.

BREAKING DOWN '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. FHA Loan

    A mortgage issued by federally qualified lenders and insured ...
  2. Uninsurable Property

    A home that is not eligible for insurance through the United ...
  3. FHA Streamline Refinance

    A mortgage-refinancing option offered by the Federal Housing ...
  4. Mutual Mortgage Insurance Fund

    A fund that insures mortgages made by the Federal Housing Administration ...
  5. Ginnie Mae - Government National ...

    A U.S. government corporation within the U.S. Department of Housing ...
  6. Housing And Economic Recovery Act ...

    This act was created to address the subprime mortgage crisis ...
Related Articles
  1. Retirement

    Understanding FHA Home Loans

    Don't be overwhelmed when filling out these forms. Find out what you need to do here.
  2. Personal Finance

    Top Reasons To Apply For An FHA Loan

    When is it a good idea to apply for a Federal Housing Administration loan?
  3. Personal Finance

    Purchasing a Home with Bad Credit Is Possible: Here's How

    A bad credit report can become an obstacle, resulting in denials for credit or higher interest rates, but borrowers with low credit scores can still purchase a home.
  4. Personal Finance

    Where To Get A Mortgage If You Have Bad Credit

    Here's where to go if you have a low credit score and still want a mortgage.
  5. Personal Finance

    Mortgage for a Manufactured Home? Try the FHA

    FHA loans are often a good alternative for those who have trouble obtaining a conventional mortgage, although you do have to pay an insurance premium.
  6. Personal Finance

    Insuring Federal Housing Authority Mortgages

    This insurance has an edge over private mortgage insurance. Find out why.
  7. Personal Finance

    HUD vs. FHA Loans: What’s the Difference?

    Sometimes these terms are used interchangeably to refer to "government loans" for would-be home buyers. But here's the distinction.
  8. Investing

    Getting Help With Your Down Payment

    It's not as easy as it once was to save for a down payment, but these tips can help give you a head start.
  9. Personal Finance

    Millennials Guide: How to Pick the Right Mortgage

    Here’s help in finding the perfect, affordable loan for that home you have been dreaming about.
  10. Personal Finance

    When You Need a Jumbo or Super-Jumbo Mortgage

    Rising housing prices have made so-called jumbo and super-jumbo loans a necessity for more homebuyers.
RELATED FAQS
  1. Does an FHA loan require a down payment?

    Learn about Federal Housing Administration (FHA) loans, which have down payments as low as 3.5%, low closing costs and lower ... Read Answer >>
  2. Are FHA loans fixed?

    Learn more about Federal Housing Authority (FHA) loan programs, the requirements for qualifying and how such loans can be ... Read Answer >>
  3. What's the Difference Between FHA and Conventional Loans?

    Conventional mortgages require higher credit scores than FHA mortgages. Read Answer >>
  4. Does the FHA provide construction loans?

    Learn how you can save with FHA-insured construction and rehabilitation mortgages that allow you to finance construction ... Read Answer >>
  5. Can FHA loans be used for investment property?

    Learn the unique situations in which a home buyer can take advantage of the FHA home loan program to finance an investment ... Read Answer >>
  6. What is an FHA Streamline Loan?

    Refinance your high-interest-rate mortgage with an FHA streamline. The process is quick and easy and can work for most existing ... Read Answer >>
Hot Definitions
  1. Frexit

    Frexit – short for "French exit" – is a French spinoff of the term Brexit, which emerged when the United Kingdom voted to ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  6. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
Trading Center