The roots of the United States Department of Housing and Urban Development (HUD) were planted as early as the 1930s beginning with the Emergency Relief and Construction Act of 1932 which created the Reconstruction Finance Corporation (RFC) during the Great Depression. It was the first time the federal government got directly involved in the nation’s housing market. HUD housing soon evolved into a housing conglomerate.
Soon afterwards the Federal Housing Administration (FHA) was founded with the passage of the National Housing Act of 1934, the main federal agency handling mortgage insurance which is at the core of HUD foreclosures today.
The Act of 1934 also authorized the FHA to create what we know today as the secondary market for the sale of home mortgages and a national association called the Federal National Mortgage Association or Fannie Mae was created by the FHA as a subsidiary of the RFC.
The nation’s public housing program was established with the passage of the United States Housing Act of 1937. After the Act of 1937 many of the federal government’s housing agencies were revamped and reorganized. As a result the Federal Loan Agency was created to oversee the FHA, the RFC, Fannie Mae, the Federal Home Loan Bank Board and the Home Owners Loan Corporation.
Then in 1940, the National Housing Agency (NHA) took over handling all of the government’s non-farm housing programs. Three years after that the NHA was replaced by the Housing and Home Finance Agency (HHFA) which was HUD’s immediate predecessor.
While the government imposed a temporary moratorium on domestic housing construction due to the war efforts of the early 1940, in 1944 it authorized the Veterans Administration (VA) to guarantee single-family and mobile home loans. A number of acts followed aimed at urban renewal of blighted areas around the country.
With Executive Order 11063, Equal Opportunity in Housing, issued in 1962, the federal government took a much needed step forward by combining civil rights with housing. That was followed by Title VI of the Civil Rights Act of 1964 which assured nondiscrimination on federally assisted programs.
Finally, the Housing and Urban Development Act of 1965 was passed, creating HUD to take over for the HHFA, but now as a cabinet-level agency. Since its inception HUD has been headed by 13 different secretaries serving at the pleasure of the President of the United States.
At present Alphonso Jackson is the HUD secretary. For fiscal year 2008, HUD’s budget was raised $1.6 billion to $35.2 billion. That’s what now makes HUD housing a great opportunity for buyers.
Key among Jackson’s goals for HUD is to promote President Bush’s agenda to increase homeownership among the nation’s minority communities as well as first time homebuyers through affordable housing programs such as the HOME Investment Partners program and the American Dream Down payment Initiative.
Another HUD program that has received a lot of attention recently on Capitol Hill is the “modernization” of the FHA which also falls under HUD’s oversight. Approved by Congress, the program allows HUD to raise the ceiling on FHA loans to more realistic levels depending on the part of the country where the loans are being made.
But like many other lenders in today’s economic climate, HUD has also become a home owner due to foreclosure on the FHA insured loans that financed many of the HUD homes that are on the market today.
Have questions? Find answers to the most common HUD-related questions in our HUD Frequently Asked Questions section.
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