The Birth of a Suburban Nation: The FHA's Contribution to America's Sprawling and Segregated Residential Patterns

The Federal Housing Authority (FHA) was established by Title I of the Federal Housing Act of 1934. Title II of the Federal Housing Act of 1934 tasked the FHA with providing mortgage insurance to mostly single-family homeowners but also for multifamily developments and hospitals. It is now the largest mortgage insurer in the world. It was created to help Americans realize their dreams of home ownership, and it has done so; however, in the process it also reinforced and created patterns of segregation that contributed to the decay of inner cities and the simultaneously to the rise of a largely racially homogenous suburbia. In 1944, a very similar program was enacted which guarantees mortgage loans under the Veteran's Administration (VA).