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ANSWER: C.

Before the creation of the FHA and Fannie Mae, it was hard for the average American to come up with a 50% down payment and then pay off the remaining 50% of a home's value in only a decade; at that time, the homeownership rate was below 49% (versus the current rate of 63.9%, according to U.S. Census data).

When the FHA and Fannie Mae were created, insurance against defaults became available to borrowers and banks loosened loan terms to 20% down with a longer payoff. In the ensuing decades, borrowers could make much lower down payments—as little as 0% or 3.5%.

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