Abstract

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 subprime 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.