National Housing Act of 1934

The National Act of 1934, H.R. 9620, Pub. L. 73–479, 48 Stat. 1246, enacted June 27, 1934, also called the Better Housing Program,^[1] was part of the New Deal passed during the Great Depression in order to make housing and home mortgages more affordable.^[2] It created the Federal Housing Administration (FHA)^[3] and the Federal Savings and Loan Insurance Corporation (FSLIC).^[4]

National Housing Act

Long title	AN ACT To encourage improvement in housing standards and conditions, to provide a system of mutual mortgage insurance, and for other purposes
Enacted by	the 73rd United States Congress
Citations
Public law	Pub. L. 73–479
Statutes at Large	48 Stat. 1246
Legislative history
Introduced in the House as H.R. 9620 Signed into law by President Franklin D. Roosevelt on June 27, 1934

The Act was designed to stop the tide of bank foreclosures on family homes during the Great Depression. With this, President Franklin D. Roosevelt used this act to fulfill his goal towards a government program funded by private investments, avoiding the reliance on taxpayer funds.^[5] The passing of the bill alleviated unemployment by making credit more accessible through banks and lending organizations. ^[6] Both the FHA and the FSLIC became the main federal agencies^[7] that worked to create the backbone of the mortgage and home building industries, until the 1980s.^[8] The FHA's guarantee against losses for mortgage lenders allowed for a system of regular monthly mortgage payments. ^[9] The FHA mortgage insurance program became an effective strategy for increasing investment in the mortgage market and still continues to be. ^[10] (See Savings and loan crisis and Financial Institutions Reform, Recovery, and Enforcement Act of 1989 that ended the FSLIC, whose activities were moved to the FDIC.)

These policies had disparate impacts on Americans along segregated lines (see Redlining):

Author Richard Rothstein says the housing programs begun under the New Deal were tantamount to a "state-sponsored system of segregation."

The government's efforts were "primarily designed to provide housing to white, middle-class, lower-middle-class families," he says. African-Americans and other people of color were left out of the new suburban communities — and pushed instead into urban housing projects.^[11][12]

The Housing Act of 1937 built on this legislation.