|
|
Article: Building and Loan Associations
- Article from:
- Dictionary of American History
- Author:
CopyrightCOPYRIGHT 2003 The Gale Group Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
|
BUILDING AND LOAN ASSOCIATIONS
BUILDING AND LOAN ASSOCIATIONS.
Prior to the New Deal reforms of the early 1930s, most home mortgages were for five years, after which time they had to be repaid in one lump-sum payment. Building and loan associations, first organized in Pennsylvania in 1831, developed in response to this situation, which effectively limited home ownership to the wealthy. Workers pooled their savings and then chose, often by lottery, who would be able to finance a home.
Upon this foundation the New Deal built an institutional structure that allowed over two-thirds of American households to own a home. The Federal Home Loan Bank Board was established to regulate the ...