Final answer:
The FHA operates under the supervision of HUD, with goals to increase homeownership and provide affordable housing. It has aided in raising homeownership rates but also has faced criticism for practices that reinforced residential segregation. HUD oversees various income security programs related to housing.
Step-by-step explanation:
The Federal Housing Administration (FHA) is under the direct supervision of the Department of Housing and Urban Development (HUD). The FHA was established in 1934 as part of the New Deal to stimulate the housing market by encouraging banks to offer affordable home loans and enforcing new safety standards for housing. While the FHA helped to increase the overall homeownership rate from around 40% during the Great Depression to around 70% in recent years, its policies also contributed to residential segregation due to discriminatory practices such as redlining and exclusion of minorities from favorable loan terms.
Over time, the FHA and other federal programs under the oversight of HUD have been instrumental in increasing homeownership and access to affordable housing. With a focus on serving U.S. housing needs, HUD oversees a range of income security programs that cater to various aspects of housing, such as subsidized housing and energy assistance. Federally backed by these departments, the federal government offers substantial aid and transfers funds to states through grant programs to further support housing and community development.