250 Years of the American Dream: History of Homeownership in America 

The introduction of the Federal Home Loan Bank Act and the formation of the Federal Home Loan Bank Board and twelve regional banks were all created in 1932 in response to poorly developed housing finance institutions leading to unsuccessful and unattainable homeownership. This legislation aimed to “provide funding and liquidity support to housing finance institutions.” 

One year later, in 1933, the Home Owners’ Loan Act and Home Owners’ Loan Corporation (HOLC) were introduced, leading to the development of long-term, fixed-rate mortgages that self-amortized over 20 years (later expanded to 30 years).” In addition, the National Housing Act created the Federal Housing Administration (FHA) in 1934, futher supporting the restructuring of home loans and the use of fixed-rate, long-term mortgages. These practices fully transformed how homes are financed, and they are still used in the housing market today.

A turning point occurred when the Housing Act of 1937 was passed, becoming the “first permanent federal program for building and subsidizing housing for low-income families in the United States,” making homeownership attainable for the lower classes as well. $500 million in bonds were granted by the United States Housing Authority to fun construction projects. However, the law also “required the demolition of slum housing for every new unit built, tying affordable housing construction directly to urban renewal,” which quickly became known for gentrifying lower-class neighborhoods of color, renewing them for farer-skinned benefit. Revisions to the act were later introduced to prevent this discrimination and other inequalities; however, the changes could not undo the damage that had been done to the lower-class neighborhoods.

On July 2, 1964, the Civil Rights Act was signed into effect by President Lyndon Johnson, signifying the political and social fight for equality. Then, in 1968, amendments were made, prohibiting “discrimination concerning the sale, rental, and financing of housing based on race, religion, national origin, sex, (and as amended) handicap and family status,” furthering the push for equality for all in the housing market. That same year the Fair Housing Act was also passed, which influences all housing policies to this day, providing federal and state protections for individuals in an effort to ensure all receive fair housing opportunities.

Until 1974, women were still forced to depend on men in their life, whether that was a father, brother, uncle, or other male figure, for any financial endeavors because women were not allowed to build credit. If you wanted a credit card, it would be in your husband’s name, and he was the only one able to build credit. If you wanted to apply for a loan, a man needed to sign for it, because even if you had the money and were responsible, you were not allowed to grow your own credit. In an effort to curb this dependency, the Equal Credit Opportunity Act (ECOA) was passed on October 28, 1974, “making it illegal for banks to discriminate in lending based on sex or marital status.” This was groundbreaking for single mothers, widows, and women across the nation as it granted them more freedom, independency, and agency in their success and dreams.

After observing the United States market crash in September 2008, and the nation’s poor financial conditions leading up to the event, Treasury Secretary Timothy Geithner issued a reform plan known today as the Dodd-Frank Wall Street Reform and Consumer Protection Act. This plan assisted the House and Senate in restabilizing the nation’s economy, making changes to bank regulations, so failures were less likely to occur. The act also established new mortgage standards addressing the foreclosure crisis caused by unfair lending practices within the housing market. This act remains to serve as the foundation for financial regulation in the United States today, influencing modern housing market practices.