America is swallowed up in The Great Depression. Out of every ten households, only four own their own homes.

The normal mortgage is limited to 50% of the home's value. If you want to buy a home, that means you must come up with a 50% down payment.

The 30 year fixed rate mortgage, considered the staple of mortgage financing today, doesn't exist. Most home mortgages have a payment term of three to five years and end with a large balloon payment.

Banks are scarce that will help homeowners searching for mortgages.

Unemployment becomes the norm. More than 2,000,000 construction workers alone are jobless.

The Federal Housing Administration with its FHA mortgage loans is conceived in this setting.

In 1934, the federal government created the most successful government program in history, the Federal Housing Administration, also known as FHA. The purpose - to revive the dream of homeownership.

FHA has continued to the housing rescue many times throughout its history just as it did during the Depression.

After World War II, housing was in short demand. Veterans returning from the war wanted to settle down but there was a shortage of housing and mortgage financing.

Again FHA came to the rescue. FHA home loans made it possible for returning Veterans to get mortgage financing for their families after the war.

In future eras, low to moderate income workers, senior citizens and the physically challenged benefited from FHA's energy. Apartment dwellings were created in mass, providing safe and secure housing for Americans who might have gone homeless. FHA had come to the rescue again.

In the 1970's, the American economy ran rampant with out of control inflation. Energy costs threatened to undo our economy.

FHA appeared on the scene providing emergency financing for apartment owners strapped for cash. FHA helped keep them above water lessening the chance of greater financial disaster.

In the 1980's, private mortgage insurers were pulling out of any states in America whose economies were prominently connected to oil production. Recession was reeking havoc but FHA moved to steady decreasing home prices by insuring FHA mortgage lenders against loss.

The success of FHA home loans has made the United States the best housed country in the world. In 2001, the homeownership rate soared to more than 68%.

But here is the most amazing part of all. FHA is not taxpayer funded. It is not subsidized by the Federal Government. It is totally and completely funded by insurance premiums collected directly from FHA borrowers.

Today, FHA is coming to the rescue again. We are all well aware that the housing market is in the dumps. Selling a home is difficult. Refinancing is also difficult. Lenders have disappeared and money is tight.

George W. Bush has enacted Hope For Homeowners in recent days. This program was created specifically for borrowers facing difficulty making mortgage payments. The program goes into effect October 2008 and borrowers will be able to refinance with FHA-insured mortgages that are affordable.

More over, the Federal Housing Administration has greatly expanded loan limits to aid in stabilizing the housing and home loan industry.

In future articles regarding FHA home loans, I will explain some of the key benefits to FHA mortgage financing as well as essential elements to qualifying for FHA home loans.