I don’t think that government backed loans are a problem by themselves, and things would be fine if the bubble hadn’t occurred. I think a lot of the programs are good ideas, and generally do promote stability in lower income families. Remember here in SoCal it seems you need to make at least 80k just to get by with some decent standard of living, and the ability to save for retirement. If there hadn’t been a bubble, the homes would have held their value, and the banks would have been able to recover their costs without the government stepping in.