> For the complete documentation index, see [llms.txt](https://userdocs.tadaima.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://userdocs.tadaima.finance/appendix/housing-market-history/fdrs-new-deal.md).

# FDR's New Deal

### **The 1920s-1970s: Stabilization and Expansion of Homeownership**

#### **The New Deal and the FHA (1930s-1940s)**

* In response to the Great Depression and the collapse of the housing market, **President Franklin D. Roosevelt’s New Deal programs revolutionized homeownership.**
* The **Federal Housing Administration (FHA), established in 1934, introduced the 30-year, fixed-rate mortgage**, allowing middle-class Americans to buy homes with lower down payments and affordable monthly payments.
* The **Home Owners’ Loan Corporation (HOLC)** helped refinance homes to prevent foreclosures.
* The **GI Bill (1944)** provided returning World War II veterans with low-interest, no down payment loans, dramatically expanding suburban homeownership.

#### **The Role of the Federal Reserve and Banking System Stabilization**

* The creation of the **Federal Reserve in 1913** laid the groundwork for more stable banking practices and standardized lending.
* The **Glass-Steagall Act of 1933** separated commercial and investment banking, reducing risky speculation that had contributed to the 1929 stock market crash.
* The **Federal Deposit Insurance Corporation (FDIC)** insured deposits, restoring public confidence in banks.

#### **Post-War Suburban Boom (1950s-1960s)**

* Mass production techniques pioneered by developers like **William Levitt (Levittown)** made suburban housing affordable for millions.
* **Interstate highway construction** and increased car ownership allowed families to move to the suburbs.
* **Racially discriminatory practices like redlining and restrictive covenants** excluded minorities from these opportunities, contributing to racial wealth disparities that persist today.

#### **The 1970s: Inflation and Housing Policy Shifts**

* Rising inflation and interest rates in the 1970s made borrowing more expensive.
* The **Community Reinvestment Act (1977)** aimed to combat redlining and increase minority access to mortgages.

***

### **The Big Picture**

The **New Deal programs, banking system stabilization, and post-war policies transformed homeownership into the "American Dream,"** leading to a surge in suburban living and the **homeownership rate reaching nearly 65% by 1970.**