This report traces the historical development of federal housing policy that has promoted a 40% decline in substandard housing and a 20% increase in homeownership over the past 50 years. It presents emerging national and rural housing policy concerns: the proper role of federal, state, and local governments in the mortgage credit and insurance industries and the secondary mortgage markets; the design of federal housing and tax policies that will best encourage homeownership and still aid the neediest households in the most cost-effective manner; the development of demand-side subsidy programs that will encourage an increased supply of rental housing and aid low-income households; and the targeting of households who have insufficient income to afford adequate housing. Other policy issues considered are the affordability of homeownership for young families and the impact of changes in the tax status of rental properties on the quantity, quality, and cost of rental units. The report discusses differing housing needs of rural areas and shows percentages of funding obligations of selected housing programs going to nonmetropolitan areas. An appendix lists federal housing inadequacy criteria. (NEC)