With much of the rest of the mortgage industry in disarray, the Federal Housing Administration has found itself occupying an expanded market niche.

FHA is a mortgage insurer that is part of the Department of Housing and Urban Development that has traditionally been seen as a giving a boost to the market for lower income and first time home buyers. Generally, FHA insured loans have had lower down payments and easier points of entry for borrowers and the agency often seemed sidelined during the previously rapidly growing housing and mortgage markets.

But since the downturn the agency has seen its role grow significantly. According to Gerald Glavey, director of processing and underwriting at the Department of Housing and Urban Development's Philadelphia Home Ownership Center, FHA has seen its share of the market move from 3% last year to 25% this year.