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Unformatted text preview: ance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 5: GOVERNMENT PARTICIPATION & BACKED LOANS CHAPTER 5: GOVERNMENT PARTICIPATION & BACKED LOANS PREVIEW
In this chapter we will first examine the mortgage insurance programs of the Federal Housing Administration. In addition to these FHA programs, we will examine the guaranteed programs offered by the government: the Federal Housing Administration (FHA), U.S. Department of Veterans Affairs, and state Cal–Vet loans and other federal and state programs. THE FEDERAL RESERVE SYSTEM
One of the most powerful government agencies in the United States, the “Fed” has a major influence on the economy and greatly affects the real estate market, through its control of monetary policy. PURPOSE
The Federal Reserve was created with the specific purpose of reducing the risk and severity of financial crises, by regulating the flow of money and credit in the United States. This in turn promotes high employment and economic growth, and stabilizes the value of the dollar. The Fed monitors member banks and their liquidity. It also seeks to control the rate of inflation. The system is composed of twelve Federal Reserve districts, each with a Federal Reserve bank. With the Fed having not a central bank, but district banks located Dynasty School (www.dynastySchool.com) 5-1 REAL ESTATE FINANCE
throughout the United States, it can better respond to the different economic needs of the various areas of the nation. Many of the Federal Reserve Banks also operate Federal Reserve Branch Banks or offices to further break down the districts and to better serve the financial needs of the individual districts. The names of the Federal Reserve Banks and their branches, if any, are shown in figure below. Figure 5-1: Federal Reserve Banks 1 2 Boston New York – Buffalo Philadelphia Cleveland – Cincinnati – Pittsburgh Richmond – Baltimore – Charlotte Atlanta – Birmingham – Jacksonville – Miami – Nashville – New Orleans 7 8 Chicago – Detroit St. Louis – Little Rock – Louisville – Memphis Minneapo...
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