What Act was established in 1934 that created the FHA?

What Act was established in 1934 that created the FHA?

• A. National Housing Act
• B. Bank Secrecy Act
• C. Financial Crimes Enforcement Network
• D. Loan Disclosure Act

Answer: (A)

The National Housing Act, established in 1934, created the Federal Housing Administration (FHA) as part of a broader effort to stimulate the housing market during the Great Depression. This Act was significant as it aimed to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgages, and support the construction of new homes. By insuring mortgages, the FHA made it more accessible for individuals to purchase homes, thereby encouraging the growth of the housing market and promoting economic recovery during a challenging period in American history. The other options do not relate to the establishment of the FHA or the context of housing finance reform during the 1930s. For instance, the Bank Secrecy Act, while important in regulating financial behavior, was introduced much later in 1970. Similarly, the Financial Crimes Enforcement Network focuses on tracking financial crimes and anti-money laundering efforts, not housing finance. The Loan Disclosure Act also pertains to different aspects of the mortgage process, primarily concerning disclosures and transparency in lending rather than the foundation of the FHA.

The National Housing Act, established in 1934, created the Federal Housing Administration (FHA) as part of a broader effort to stimulate the housing market during the Great Depression. This Act was significant as it aimed to improve housing standards and conditions, provide an adequate home financing system through insurance of mortgages, and support the construction of new homes. By insuring mortgages, the FHA made it more accessible for individuals to purchase homes, thereby encouraging the growth of the housing market and promoting economic recovery during a challenging period in American history.

The other options do not relate to the establishment of the FHA or the context of housing finance reform during the 1930s. For instance, the Bank Secrecy Act, while important in regulating financial behavior, was introduced much later in 1970. Similarly, the Financial Crimes Enforcement Network focuses on tracking financial crimes and anti-money laundering efforts, not housing finance. The Loan Disclosure Act also pertains to different aspects of the mortgage process, primarily concerning disclosures and transparency in lending rather than the foundation of the FHA.