What are the problems that the FHA had before the creation of the agency?

Before the creation of the Federal Housing Administration (FHA) in 1934, the U.S. housing market faced significant challenges, including widespread mortgage defaults and foreclosures during the Great Depression. Many banks were unwilling to provide long-term loans, leading to a lack of accessible financing for homebuyers. Additionally, discriminatory lending practices exacerbated housing inequality, particularly for minority communities. The FHA was established to stabilize the housing market by providing government-backed insurance for mortgages, encouraging lenders to offer loans with more favorable terms.