Mortgages: A Comprehensive Overview
A Brief History of Mortgages in the U.S.
In the early 20th century, buying a home required a 50% down payment and short-term loans with balloon payments, making homeownership unattainable for many. During the Great Depression, many lost their homes, leading the government to create the Federal Housing Administration (FHA) and Fannie Mae in the 1930s. These programs introduced the modern 30-year mortgage with lower down payments.
After World War II, these programs supported returning soldiers, fueling a housing boom. Government involvement also played a role in stabilizing the market during crises such as the 2008 financial crisis. By 2001, homeownership reached a record 68.1%. Today, FHA and Fannie Mae continue to back millions of mortgages, ensuring stability in the housing market.
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