Home ownership isn't just good for homeowners. HUD data shows neighborhoods with a high level of owner-occupied housing have lower crime rates, higher citizen participation in community affairs, better schools and better overall economic conditions than neighborhoods with low home ownership rates. FHA plays a critical role in increasing affordable housing and home ownership, two of HUD's primary goals. Under FHA's loan programs, private lenders make and process FHA-backed loans following federal underwriting guidelines. FHA guarantees the entire value of the loan in the event that a borrower defaults.
Lenders then bundle the loans into large securities, which are sold to investors.
The securities are backed by the Government National Mortgage Association, or Ginnie Mae, a government-owned corporation within HUD, which guarantees payments to investors. Under HUD 2020, FHA staff will be cut by 44 percent, from the 1996 level of 5,100 positions to 2,900. The agency's operations, which are divided between multifamily and single-family housing programs, are to be restructured. On the single-family side, FHA is consolidating 81 field offices into four home ownership offices. On the multifamily side, FHA is to consolidate 51 field offices into 18 program hubs and 33 program centers to improve administration and oversight.