Term
| HUD vs. FHA Loans: An Overview |
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Definition
You may have heard that government loans are available for would-be homeowners who are saddled with bad credit and/or a history of bankruptcies or foreclosures. In reality, though, it’s not quite that simple.
The federal government has a multitude of programs in place that support a variety of needs for Americans. In the interest of promoting homeownership—especially for low-income Americans—it may be willing to guarantee a mortgage through one of its housing programs for borrowers with less-than-optimal credit. In other words, the government promises the lender that it will make good on the loan if the defaults.
The federal government has several agencies that analyze housing in America and facilitate mortgage lending support for Americans. Some of the most well-known agencies include the U.S. Department of Housing and Urban Development (HUD) and the Federal Housing Administration (FHA). In 1965, the FHA became part of the HUD. Here we will look at the roles of these two agencies and their mortgage loan options.
KEY TAKEAWAYS
The Federal Housing Administration (FHA) is part of the U.S. Department of Housing and Urban Development (HUD).
HUD itself doesn’t do loan guarantees for individual homes unless you're a Native American.
It is solely the FHA that insures mortgages for single-family-homebuyers.
HUD
The Department of Housing and Urban Development primarily supports community development and homeownership through several initiatives. While HUD does some loan guarantees on its own, its focus is primarily on multifamily units, not individual homes (with the exception of HUD Section 184 loan guarantees, which are available only to Native Americans buying homes or other real estate). Therefore, it is the FHA to which single-family homebuyers must look for individual support.
FHA
The Federal Housing Administration is a public, government mortgage insurer. It operates from its own self-generated income. As such, it is one of the only government agencies to be entirely self-sufficient without reliance on taxpayer funding.
Most FHA-backed mortgages with a down payment of less than 20% will require some type of mortgage insurance which includes insurance premiums protecting against default. The FHA is a federal mortgage insurer that primarily focuses on insurance for low income, single-family homes. Because of its market position and focus, it has very specific requirements for the loans it will insure. |
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Term
| what does FHEO work to do? |
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Definition
| HUD’s Office of Fair Housing and Equal Opportunity (FHEO) works to eliminate housing discrimination, promote economic opportunity, and achieve diverse, inclusive communities. |
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Term
| hat is the mission of the FHEO? |
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Definition
| The mission of the Office of Fair Housing and Equal Opportunity (FHEO) is to eliminate housing discrimination, promote economic opportunity, and achieve diverse, inclusive communities by leading the nation in the enforcement, administration, development, and public understanding of federal fair housing policies and laws. |
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Term
| what are the The laws implemented and enforced by FHEO? |
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Definition
These include:
The Fair Housing Act
Title VI of the Civil Rights Act of 1964
Section 109 of the Housing and Community Development Act of 1974
Section 504 of the Rehabilitation Act of 1973
Titles II and III of the Americans with Disabilities Act of 1990
The Architectural Barriers Act of 1968
The Age Discrimination Act of 1975
Title IX of the Education Amendments Act of 1972
Section 3 of the Housing and Urban Development Act of 1968 |
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Term
| What are Some of FHEO’s activities? |
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Definition
Investigating fair housing complaints
Conducting compliance reviews
Ensuring civil rights in HUD programs
Managing fair housing grants |
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Term
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Definition
History
1937 U.S. Housing Act of 1937
1965 Department of Housing and Urban Development Act of 1965 creates HUD as Cabinet-level agency.
1966 Robert C. Weaver becomes the first HUD Secretary, January 18.
1968 Riots in major cities follow assassination of Dr. Martin Luther King Jr. Civil Rights Act of 1968 (also known as the Fair Housing Act) outlaws most housing discrimination, gives HUD enforcement responsibility. Housing Act of 1968 establishes Government National Mortgage Association (Ginnie Mae) to expand availability of mortgage funds for moderate income families using government guaranteed mortgage-backed securities.
1969 Robert C. Wood receives recess appointment as HUD Secretary, January 7. George C. Romney is appointed HUD Secretary by President Richard M. Nixon, January 22.
1970 Housing and Urban Development Act of 1970 introduces Federal Experimental Housing Allowance Program and Community Development Corporation.
1972 Pruitt-Igoe public housing buildings in St. Louis are demolished.
1973 President Nixon declares moratorium on housing and community development assistance. James T. Lynn becomes HUD Secretary, February 2.
1974 Housing and Community Development Act consolidates programs into Community Development Block Grant (CDBG) program. Section 8 tenant-based certificates increase low-income tenants' choice of housing. Gerald R. Ford becomes president following Nixon's resignation.
1975
Carla A. Hills is appointed HUD Secretary, March 10.
1977 Patricia R. Harris is appointed HUD Secretary by President James E. Carter, January 23. Urban Development Action Grants (UDAG) give distressed communities funds for residential or nonresidential use.
1979 Moon Landrieu becomes HUD Secretary, September 24. Inflation hits 19 percent, seriously impacting homebuying and home mortgage loans.
1980 Depository Institutions' Deregulation and Monetary Control Act of 1980 changes rules governing thrift institutions, expands alternative mortgages.
1981 Samuel R. Pierce Jr. is appointed HUD Secretary by President Ronald W. Reagan, January 23. Interest rates for FHA-insured mortgages peak at 15.17 percent (up from 7 percent in 1972).
1983 Housing and Urban-Rural Recovery Act of 1983 begins Housing Development Action Grant and Rental Rehabilitation programs.
1987 Stewart B. McKinney Act sets up programs to help communities deal with homelessness.
1988 Indian Housing Act gives HUD new responsibilities for housing needs of Native Americans and Alaskan Indians. Housing and Community Development Act allows sale of public housing to resident management corporations. Fair Housing Amendments Act makes it easier for victims of discrimination to sue, stiffens penalties for offenders.
1989 Jack F. Kemp is appointed HUD Secretary by President George H. W. Bush, February 13. Financial Institutions' Reform, Recovery, and Enforcement Act bails out failing thrift institutions.
1990 Cranston-Gonzalez National Affordable Housing Act emphasizes homeownership and tenant-based assistance, launches HOME housing block grant. Low-Income Housing Preservation and Residential Homeownership Act of 1990 fortifies Federal commitment to preservation of -assisted low-income, multifamily housing.
1992 Federal Housing Enterprises' Financial Safety and Soundness Act of 1992 creates HUD Office of Federal Housing Enterprise Oversight to provide public oversight of FNMA and Federal Home Loan Mortgage Corporation (Freddie Mac).
1993 Henry G. Cisneros is named Secretary of HUD by President William J. Clinton, January 22. Empowerment Zone and Enterprise Community program becomes law as part of the Omnibus Budget Reconciliation Act of 1993.
1995 "Blueprint for Reinvention of HUD" proposes sweeping changes in public housing reform and FHA, consolidation of other programs into three block grants.
1996 Homeownership totals 66.3 million American households, the largest number ever.
1997 Andrew M. Cuomo is named by President Clinton to be Secretary of Housing and Urban Development, the first appointment ever from within the Department.
1998 HUD opens Enforcement Center to take action against HUD-assisted multifamily property owners and other HUD fund recipients who violate laws and regulations. Congress approves Public Housing reforms to reduce segregation by race and income, encourage and reward work, bring more working families into public housing, and increase the availability of subsidized housing for very poor families.
2000 America's homeownership rate reaches a new record-high of 67.7 percent in the third quarter of 2000. A total of 71.6 million American families own their homes - more than at any time in American history.
2001 Mel Martinez, named by President George W. Bush to be Secretary of Housing and Urban Development, is unanimously confirmed by the U.S. Senate on January 23, 2001.
2004 Alphonso Jackson, named by President George W. Bush to be Secretary of Housing and Urban Development, is unanimously confirmed by the U.S. Senate on March 31, 2004. Mr. Jackson is the first Deputy Secretary to subsequently be named Secretary.
2008 Steve Preston was sworn in as the 14th HUD Secretary on June 5, 2008. He was nominated by President George W. Bush and unanimously confirmed by the Senate.
2009 Shaun Donovan was sworn in as the 15th Secretary of the U.S. Department of Housing and Urban Development on January 26, 2009. President Obama named Donovan to lead the Department and the U.S. Senate confirmed his nomination to confront the challenges facing today’s housing market.
2014 Julián Castro was sworn in as the 16th Secretary of the U.S. Department of Housing and Urban Development on July 28, 2014.
2017 Dr. Ben Carson was sworn in as the 17th Secretary of the U.S. Department of Housing and Urban Development on March 2, 2017. |
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Term
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Definition
History
1937 U.S. Housing Act of 1937
1965 Department of Housing and Urban Development Act of 1965 creates HUD as Cabinet-level agency.
1966 Robert C. Weaver becomes the first HUD Secretary, January 18.
1968 Riots in major cities follow assassination of Dr. Martin Luther King Jr. Civil Rights Act of 1968 (also known as the Fair Housing Act) outlaws most housing discrimination, gives HUD enforcement responsibility. Housing Act of 1968 establishes Government National Mortgage Association (Ginnie Mae) to expand availability of mortgage funds for moderate income families using government guaranteed mortgage-backed securities.
1969 Robert C. Wood receives recess appointment as HUD Secretary, January 7. George C. Romney is appointed HUD Secretary by President Richard M. Nixon, January 22.
1970 Housing and Urban Development Act of 1970 introduces Federal Experimental Housing Allowance Program and Community Development Corporation.
1972 Pruitt-Igoe public housing buildings in St. Louis are demolished.
1973 President Nixon declares moratorium on housing and community development assistance. James T. Lynn becomes HUD Secretary, February 2.
1974 Housing and Community Development Act consolidates programs into Community Development Block Grant (CDBG) program. Section 8 tenant-based certificates increase low-income tenants' choice of housing. Gerald R. Ford becomes president following Nixon's resignation.
1975
Carla A. Hills is appointed HUD Secretary, March 10.
1977 Patricia R. Harris is appointed HUD Secretary by President James E. Carter, January 23. Urban Development Action Grants (UDAG) give distressed communities funds for residential or nonresidential use.
1979 Moon Landrieu becomes HUD Secretary, September 24. Inflation hits 19 percent, seriously impacting homebuying and home mortgage loans.
1980 Depository Institutions' Deregulation and Monetary Control Act of 1980 changes rules governing thrift institutions, expands alternative mortgages.
1981 Samuel R. Pierce Jr. is appointed HUD Secretary by President Ronald W. Reagan, January 23. Interest rates for FHA-insured mortgages peak at 15.17 percent (up from 7 percent in 1972).
1983 Housing and Urban-Rural Recovery Act of 1983 begins Housing Development Action Grant and Rental Rehabilitation programs.
1987 Stewart B. McKinney Act sets up programs to help communities deal with homelessness.
1988 Indian Housing Act gives HUD new responsibilities for housing needs of Native Americans and Alaskan Indians. Housing and Community Development Act allows sale of public housing to resident management corporations. Fair Housing Amendments Act makes it easier for victims of discrimination to sue, stiffens penalties for offenders.
1989 Jack F. Kemp is appointed HUD Secretary by President George H. W. Bush, February 13. Financial Institutions' Reform, Recovery, and Enforcement Act bails out failing thrift institutions.
1990 Cranston-Gonzalez National Affordable Housing Act emphasizes homeownership and tenant-based assistance, launches HOME housing block grant. Low-Income Housing Preservation and Residential Homeownership Act of 1990 fortifies Federal commitment to preservation of -assisted low-income, multifamily housing.
1992 Federal Housing Enterprises' Financial Safety and Soundness Act of 1992 creates HUD Office of Federal Housing Enterprise Oversight to provide public oversight of FNMA and Federal Home Loan Mortgage Corporation (Freddie Mac).
1993 Henry G. Cisneros is named Secretary of HUD by President William J. Clinton, January 22. Empowerment Zone and Enterprise Community program becomes law as part of the Omnibus Budget Reconciliation Act of 1993.
1995 "Blueprint for Reinvention of HUD" proposes sweeping changes in public housing reform and FHA, consolidation of other programs into three block grants.
1996 Homeownership totals 66.3 million American households, the largest number ever.
1997 Andrew M. Cuomo is named by President Clinton to be Secretary of Housing and Urban Development, the first appointment ever from within the Department.
1998 HUD opens Enforcement Center to take action against HUD-assisted multifamily property owners and other HUD fund recipients who violate laws and regulations. Congress approves Public Housing reforms to reduce segregation by race and income, encourage and reward work, bring more working families into public housing, and increase the availability of subsidized housing for very poor families.
2000 America's homeownership rate reaches a new record-high of 67.7 percent in the third quarter of 2000. A total of 71.6 million American families own their homes - more than at any time in American history.
2001 Mel Martinez, named by President George W. Bush to be Secretary of Housing and Urban Development, is unanimously confirmed by the U.S. Senate on January 23, 2001.
2004 Alphonso Jackson, named by President George W. Bush to be Secretary of Housing and Urban Development, is unanimously confirmed by the U.S. Senate on March 31, 2004. Mr. Jackson is the first Deputy Secretary to subsequently be named Secretary.
2008 Steve Preston was sworn in as the 14th HUD Secretary on June 5, 2008. He was nominated by President George W. Bush and unanimously confirmed by the Senate.
2009 Shaun Donovan was sworn in as the 15th Secretary of the U.S. Department of Housing and Urban Development on January 26, 2009. President Obama named Donovan to lead the Department and the U.S. Senate confirmed his nomination to confront the challenges facing today’s housing market.
2014 Julián Castro was sworn in as the 16th Secretary of the U.S. Department of Housing and Urban Development on July 28, 2014.
2017 Dr. Ben Carson was sworn in as the 17th Secretary of the U.S. Department of Housing and Urban Development on March 2, 2017. |
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