A new study from Ed Pinto of the American Enterprise Institute (AEI) is stirring up debate on whether Federal Housing Administration-backed loans are helping the working class, or in fact, creating more economic hardship for lower-income Americans. 

Pinto released a new study, saying he found more than 9,000 U.S. zip codes with a projected foreclosure rate of 10% or more on FHA-backed loans.

Pinto suggests the terms of the FHA loans offer a negative combination of low down payments, poor credit guidelines and high debt-to-income ratios that greatly impact lower-income households, keeping them stretched from payment to payment.

He explained, "The resultant foreclosures – along with destroyed credit and loss of the very equity families were working to build – dashes their dream of homeownership."

The study gained attention in the New York Times, where the FHA pushed back against some of the assertions with a spokesman saying the data ignores the millions of Americans who have successfully gained mortgage financing access through the FHA.

Click here to read more.