Housing Policy, Mortgage Policy, and the Federal Housing Administration

Institute of Business and Economic Research (IBEN)

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Date Published 2009
Version Working Paper No. W07-004
Primary Author Dwight Jaffee and John M. Quigley
Other Authors
Country United States


This paper provides a survey of federal housing programs, establishing the primary importance of indirect and off-budget activities in promoting housing and providing subsidies to housing consumers. We consider the role of the Government Sponsored Enterprises (GSEs) and the Veterans’’ Administration in supplying liquidity and credit guarantees. We then consider in more detail the role of the FHA as supplier and guarantor of credit. We especially focus on the rationale for these activities in the light of the rise and subsequent collapse of the sub-prime mortgage market. We suggest that a reinvigorated FHA mortgage program will be highly useful in its own right and might be the appropriate agency to assume many of the activities currently undertaken by the GSEs.

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