National Housing Act
The National Housing Act was passed by Congress, and signed into law by FDR, in 1934. It created the Federal Housing Authority (FHA), an agency designed to boost loans for building houses. Before the Great Depression, the federal government had very little involvement in the housing market, so the FHA role was groundbreaking.
This bill is one of those hidden pieces of legislation that radically transformed the possibility for the American working class to have a middle-class life at home, all built on federal guarantees to regulation of the mortgage industry and the mechanics to push money into the hands of homeowners. It propped up whole industries and paved the way to the suburbs that brought workers out of slum and into new (or improved) homes.
Cry Wolf Quotes
Taken as a whole, the effect of the creation of the insurance corporation is to put the Government directly into the lending business, not only for the repair of homes, but for the installation of frigidaires, water heaters, and other equipment, and as to which there would be no lien whatever. Furthermore, it puts the Government directly into the business of lending as much as 80 percent for the construction of new homes, and an unlimited percent for low-cost housing. The practical application of this act would be to drive existing lending institutions out of business; and by reason of loans where there is no security, will mean untold losses to the Government.
…we are convinced that first and most fundamental, the bill sets up machinery which leads straight for Federal regimentation of American home-buying, home building, home finance, and home repair.
Mr. Chairman, the country does not want to give away its birthright to capital, and this sets up capital and a political organization at the top of it. It is the marriage of capital and politics, and you cannot escape it to save your life.
We do not think there is either any social or any economic necessity for the insurance of present mortgages.
