In 1937, under an act of Congress, the Federal
Housing Administration was established to provide American families
with a unique opportunity to become home owners. Formerly, a home
buyer's options were only limited to short term loans ranging from
1 to 5 years in term. Borrowers had to put as much as 40 to 50 percent
down on the property and pay off the entire loan balance by the end
of the term. FHA revolutionized the mortgage industry at the time
by offering the 30 year mortgage and made the possibility of home
ownership available to Americans nationwide. Throughout the years,
a variety of programs have spawned from this revolution to make home
ownership easier, more affordable, and attainable to Americans.
Though HUD is not a direct lender, it is the Department's
responsibility to maintain an ongoing program designed to
monitor the overall quality of loans originated from HUD
approved lenders. HUD is an insurer of loans, protecting
lenders against potential losses suffered from default and
foreclosure. The "mortgage insurance premium"
collected from the borrower on each loan helps defray costs
associated with this program
Massachusetts Lender License # MC3564
