paper seeks to reconcile this paradox by focusing on linkage between GSE purchases and FHA activities. We build a simple … model based on credit rationing theory that suggests that GSE activities can have a feedback effect on FHA. More aggressive … GSE pursuit of targeted borrowers under the affordable housing goals induces potential FHA borrowers with best credit …

homeownership; irrational consumer expectations of rising housing prices; inelastic housing supply. None of these explanations …

The 1992 Federal Housing Enterprises Financial Safety and Soundness Act (GSE Act) mandated that a specified percentage … to the GSE Act as a root cause of the recent housing crisis. This paper evaluates the link between the GSE Act and … the GSE Act’s single-family affordable housing goals altered mortgage lending or purchasing decisions. To identify this …

of those loans. To the investor in FHA-insured mortgages, such offsets could serve to appreciably reduce total loan … termination risk and in so doing boost investment returns. To assess those effects, this paper employs micro-data from the FHA to … borrowers, in a manner consistent with their lower termination risks, would serve to advance both their homeownership …