The article explores how subprime lending affects the housing market by looking at where Federal Housing Administration (FHA)-eligible loans are distributed. It finds that subprime lenders are more active in cities with higher economic risks. Subprime lenders tend to sell most loans, but they are more likely to keep them when economic risks are improving in risky areas. When more loans are given in underserved areas, subprime lenders are more likely to keep them.