What Is The National Housing Act?
The National Housing Act was proposed to help US citizens have equal access to homeownership. The law recognizes the basic needs of humans in which shelter is one.
The National Housing Act, signed on June 27, 1934, by President Franklin D. Roosevelt to improve housing conditions, make housing and mortgages more accessible and affordable, and reduce the foreclosure rate during the Great Depression. The law was an important part of the New Deal.
After the great depression, many financial institutions were affected, which caused a backlash on mortgages; the people of the United States were unable to access houses as many projects halted. The construction industry was also greatly affected. The NEW DEAL revolved around many things in which the National Housing Act was also included.
After the emergence of The National Housing Act, it paved the way for creating the Federal Housing Authority (FHA) and the Federal Savings and Loan Insurance Corp (FSLIC), which helped low-income families buy homes. The FSLIC insured mortgages, making it possible for federally chartered lenders to give out long-term loans so that just about anyone can afford and pay at or before the due date.
The FHA helped revive mortgage lending and the construction industry by providing federal guarantees for loans made by building and loan associations, banks, and other financial institutions. The loans stimulated the building of homes, farm buildings, and small businesses and restored jobs in construction trades.
Another National Housing Act was passed in 1937 that empowered the FHA to clean up slum areas. The FHA made low-interest, 60-year loans to local governments to build apartment blocks, which were then rented to low-income families; even after this, discrimination and racism remained.
Later incorporated into the Department of Housing and Urban Development (HUD), the FHA guarantees mortgages issued by the agency’s approved lenders, resulting in FHA loans carrying easier terms than traditional loans.
National Housing Act Example
Alex is a black American citizen; according to him, his parents’ home was passed by his paternal grandfather, who was a beneficiary of the National Housing Act after many struggles.« Back to Glossary Index