Housing and Urban Development Department

• Author: Jeffrey Lehman, Shirelle Phelps

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The Department of Housing and Urban Development (HUD) is the principal federal agency responsible for programs concerned with housing needs, fair housing opportunities, and improving and developing U.S. communities.

HUD was established in 1965 by the Department of Housing and Urban Development Act (42 U.S.C.A. § 3532?3537). Its major functions include insuring mortgages for single-family and multifamily dwellings and extending loans for home improvements and for the purchase of mobile homes; channeling funds from investors into the mortgage industry through the GOVERNMENT NATIONAL MORTGAGE ASSOCIATION; and making loans for the construction or rehabilitation of housing projects for older and handicapped persons. HUD also provides federal housing subsidies for low- and moderate-income families, makes grants to states and local communities for development activities related to housing, and promotes and enforces laws, policies, and regulations supporting fair housing and equal housing opportunities.

HUD is administered under the supervision and direction of a cabinet-level secretary appointed by the president. The secretary of HUD formulates recommendations for housing and community development policy and works with the Executive Office of the President and other federal agencies to ensure that housing

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policies are consistent with other economic and fiscal policies of the government. In addition, the secretary encourages private enterprise to serve the housing and community development needs of the nation whenever possible and promotes the use of initiatives within the state, local, and private sectors to spur the growth of housing and community development resources. Equally important, the secretary ensures equal access to housing and promotes nondiscrimination. The secretary also oversees the FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA). FNMA, also known as Fannie Mae, was chartered by Congress in the late 1960s as a stockholder-owned, privately managed corporation to provide a secondary market for home mortgages. Fannie Mae purchases home mortgages and then issues SECURITIES funded by the monthly principal and interest payments of homeowners.

Several program areas within HUD carry out the department's goals and functions. The assistant secretary for housing, who also acts as the federal housing commissioner, underwrites property improvement loans and loans for manufactured...