According to government regulations, what must the majority of a savings and loan association's assets be invested in?

The regulations governing savings and loan associations require that the majority of their assets be invested in real estate loans. This is grounded in the historical purpose of savings and loan associations, which were established primarily to promote homeownership by providing affordable mortgage financing. As such, these institutions focus on lending practices that support residential property purchases.

By mandating that a significant portion of their assets be allocated to real estate loans, these regulations ensure that savings and loan associations maintain stability and alignment with their core mission of supporting the housing market. This structure is designed to promote sound lending practices and to help secure the financial interests of depositors who expect their savings to be invested in secure and tangible assets like real estate.

The other investment options, such as stock market investments, corporate bonds, and government securities, do not adhere to the primary focus of savings and loans on facilitating homeownership. While these alternative investments might offer returns, they do not align with the fundamental operating principles and regulatory requirements that govern savings and loan associations.