White Paper: “Evolution of the US Housing Finance System: A Historical Survey and Lessons for Emerging Mortgage Markets”

The study of the evolution of the “US Housing Finance System:  A Historical Survey and Lessons for Emerging Mortgage Markets,” was commissioned by HUD’s Office of Policy Development and Research to explain the growth of the US housing system over time, particularly for an international audience. This paper charts the evolution of our nation’s housing finance system. It provides a historical account that illuminates the process of linking borrowers with investors/savers and five different financial intermediation models gleaned from the US experience. The authors examine practices that can be of use to nations with emerging mortgage markets, which are facing challenges in wholesale funding, risk sharing and management, and affordable lending products. The mortgage market experiences of Mexico, Korea, South Africa, and Poland are also summarized in comparison to the US system.