Housing Finance and the Secondary Mortgage Market Alternatives for Change

When making a decision about housing, a household must choose between renting and owning. Multiple factors, such as a household's financial status and expectations about the future, will influence the decision. Few that decide to purchase a home have the necessary savings or available financial resources to make the purchase on their own. Most need to take out a loan. A loan that uses real estate as collateral is typically referred to as a mortgage. This book serves as a primer that explains how the system of housing finance works. This book also examines various mechanisms that policy-makers could use to attract more private capital to the secondary mortgage market; and addresses how those mechanisms could be combined in different ways to help the market make the transition to a new structure during the coming decade.