The Federal Housing Administration (FHA), a wholly owned government corporation, was established under the National Housing Act of 1934 to improve housing standards and conditions; to provide an adequate home financing system through insurance of mortgages; and to stabilize the mortgage market. FHA was consolidated into the newly established Department of Housing and Urban Development (HUD) in 1965. Since 1934, FHA has been extremely successful in achieving these goals. An FHA loan allows you to put a very low down payment on your home. The maximum loan limit is based on the average cost of living in your area. The FHA program for homebuyers is one of the most popular due to the ease of qualifying and low down payments.