A Look Back at the Great Depression and FHA Loans

Back in the day that it was formed, the Federal Housing Administration has always been designed to cater to the middle and low income families who need loans. This is no surprise since the Federal Housing Administration or FHA was created during the great depression when millions of Americans were all in the brink of bankruptcy and people where loosing nearly everything.

One can just look back at the Great Depression and truly feel the suffering of the American people during those times. There are many pictures documenting how people gathered in the streets to get food and one day hiring jobs. There were also a lot of rich people who were severely damaged by that economic depression. A lot of companies sunk down to the abyss and the many business men, in their great dismay, even took their own lives as a consequence of the unbearable loss.


FHA loan mortgage

Now, we are sort of seeing a repeat of what happened all those years ago. Now, the degree of poverty might not exactly be the same, but the general blow to the economy, they say, is just as big. Millions and millions of U.S. citizens are jobless and homeless. There are many businesses that are closing down. Foreclosure signs are as common as daisies. Bankruptcies are going on left and right. The Obama administration is doing something about this mess of an economy handed to them by the Bush administration. The Obama bailout program is injecting money to the FHA in order to provide people with a loan that they can get despite their credit score or income.

This is the FHA loan. These are loans that insured by the federal government. That means that if the borrower defaults on this loan, the FHA is going to pay the bank or private lender to cover the balance.