The government bodies that influence national fiscal policies include the Housing Finance Board, Housing and Urban Development (HUD), and the Federal Housing Administration (FHA). The Housing Finance Board is responsible for setting mortgage rates for home and property, and regulates banks that supply money to local lenders, ensuring that they are lending money to suitable persons at appropriate rates. Housing and Urban Development is responsible for working with the community to encourage more people to become homeowners. They also work to provide low-income families the opportunity to obtain homes. The Federal Housing Administration is responsible for insuring bank loans for home buying, or the building of a new home. The FHA aims to provide better housing standards and conditions. Federal banks can make decisions regarding fiscal policy, including whether or not to increase or decrease interest rates. Results of either of these actions can affect mortgage rates and housing prices, because lower interest rates can make opportunities to buy or build available to more people, because more people will be able to afford it. Higher interest rates will do the opposite, and will therefore lead to less spending. For myself in considering on whether or not to purchase a home, it is important to know if the interest rate is relatively low compared to others, and if I am able to get a fixed rate, rather than a variable rate which can fluctuate at any time. If the HUD can offer lower interest rates as a means to get more people to purchase homes, even if they have a lower income, this could affect the area that I purchase in, and the bank that I take out my loan from, because you don’t want to take out a loan with a bank that is going bankrupt. If a loan gets sold to another bank, you might lose your fixed rate and may become at risk for more complications with higher prices, costing myself more money than I originally planned.
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