As the lines of battle form in the debate over the future of the Federal Housing Administration, it is important to distinguish between the concept of a federal mortgage insurance program and the FHA itself. The FHA is a delivery system. There is plenty of room to reform and reengineer it. It is the federal insurance product that is critical. Sixty years of history show us that a federal mortgage insurance program is viable, and that the product is needed.

The debate over the future of FHA forces us to do something we should do more often - go back to first principles and ask, What is the role of government in housing? What should be the role of government in housing?

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