While the recent financial crisis has demonstrated that housing markets are a key feature of global and domestic financial systems -- with the potential to destabilize the entire global economy -- surprisingly little is known about the systematic differences in housing finance policy across advanced economies. This study examines the variation of housing finance policies in the U.S. and Germany, with a particular focus on the most important tax and mortgage-finance policies. While tax policies provide ways in which governments can subsidize the housing sector and homeowners, governments also often provide guarantees in the mortgage market and shape the terms and cost of mortgage financing. There are significant and puzzling differences across states in their mix of these instruments, and in who gets what kind of government benefit. This study seeks to explain this variation in a multi-method research design, combining quantitative and qualitative methods. The core of this study is a comparative-historical analysis of the most important housing finance policies and institutions in the U.S. and Germany, through which governments have supported housing markets. This research has larger implications for how to think about the welfare state, financial markets, and economic growth.