Housing Finance

The Federal Housing Administration (FHA), created during the Depression to insure lenders against losses on home mortgages and to expand opportunities for low- and moderate-income persons to buy homes, had nearly $320 billion in mortgages outstanding as of September 1992. FHA insured 5.6 percent of all single-family mortgages made in 1992. This briefing report provides information on the characteristics of borrowers with single-family home loans insured by FHA through its Mutual Mortgage Insurance Fund. GAO examines how the income, age, and race of borrowers of FHA-insured mortgages and the location of their homes have changed since the 1970s, when FHA first began collecting data on these characteristics.

GAO found that: (1) 24 percent of FHA-insured mortgages originated in 1991 went to low-income families, and 41 percent of FHA-insured loans originated in 1991 went to moderate-income families; (2) the portion of FHA borrowers under the age of 30 decreased between 1976 and 1991, although buyers under 30 consistently made up a large proportion of FHA borrowers; (3) minorities made up a higher proportion of FHA borrowers than of all U.S. home buyers; and (4) the percentage of FHA-insured mortgages originated for homes in urban neighborhoods was smaller in 1991 than in 1976.