The Downs and Ups of FHA Lending: The Government Mortgage Roller Coaster Ride

Vice President Marsha Courchane, along with co-authers Rajeev Darolia of the University of Missouri and Peter Zorn of Freddie Mac, discuss mortgage markets throughout the last decade. Mortgage markets experienced both a considerable decline and a considerable increase in the share of the market served by the FHA. Concerns have grown about the solvency of the program, while simultaneously there is increasing concern about the access to credit of the borrowers served by the FHA market. This paper attempts to explain FHA lending patterns, particularly the dramatic downs and ups of FHA lending. Authers pay particular attention to the drivers of these changes, and the implications of these changes for FHA lending, the mortgage market, and associated policymaking.