<P> The National Housing Act of 1934, H.R. 9620, Pub. L. 73--479, 48 Stat. 1246, enacted June 27, 1934, also called the Capehart Act, was part of the New Deal passed during the Great Depression in order to make housing and home mortgages more affordable . It created the Federal Housing Administration (FHA) and the Federal Savings and Loan Insurance Corporation (FSLIC). </P> <P> The Act was designed to stop the tide of bank foreclosures on family homes during the Great Depression . Both the FHA and the FSLIC worked to create the backbone of the mortgage and home building industries, until the 1980s . (See Savings and loan crisis and Financial Institutions Reform, Recovery, and Enforcement Act of 1989 that ended the FSLIC, whose activities were moved to the FDIC .) </P> <P> The Housing Act of 1937 built on this legislation . </P>

The national housing act of 1934 was an instrumental program in the growth of