Many credit unions remain trapped between rising consumer and member demand for mortgages backed by the FHA and HUD regulations governing those loans.

The FHA does not make loans. The agency issues insurance that protects lenders from losses if the borrowers default. Historically, the loans allowed many homebuyers to purchase their first homes and were widely seen as almost a holdover from the programs put into place during the 1930s.

As a result, FHA-backed loans spent most of the housing bubble as the ugly children of a union between a government authority and the early housing market. They sometimes carried a stigma from being associated with a program meant to help low-income borrowers when growing numbers of lenders considered those borrowers the best customers for their newfangled subprime loans. Further, FHA-backed loans also came dressed in engulfing cloaks of confusing and sometimes contradictory federal rules and regulations. And they seemed to have lost their foundational reason to exist. After all, if home prices were widely seen as perpetually rising and continuing refinancing, who needed insurance against default?