Don’t Be Fooled by the FHA ‘Bailout’ Hysteria

Friday’s announcement that the Federal Housing Administration may soon need taxpayer support for the first time in its 78-year history is sure to energize critics of the government-run mortgage insurer.

It will be months before we know the final tab, but even the $16.3 billion estimate released today is a small price to pay for the agency’s efforts to rescue the housing market.

Without the agency’s help in recent years, it would have been much more difficult for middle-class families to access mortgage credit since the housing crisis began. As private capital fled the mortgage market, FHA insurance propped up demand for homes, preventing housing construction and sales from plummeting even further than they did.

This article was originally published in American Banker.