What is FHA? FHA stands for the Federal Housing Administration, a government agency that promotes access to home ownership and stability in the mortgage market. Originally established as a New Deal.

The History of FHA. Congress created the Federal Housing Administration (FHA) in 1934. The FHA became a part of the Department of Housing and Urban Development’s (HUD) Office of Housing in 1965. When the FHA was created, the housing industry was flat on its back: Two million construction workers had lost their jobs.