Bank of America will pay $1 billion to settle on the largest False Claims Act relating to mortgage fraud.

As part of the $25 billion settlement, Loretta E. Lynch, U.S. attorney for the Eastern District of New York, announced that the government will resolve its claims against Bank of

America, Countrywide, and certain Countrywide subsidiaries and affiliates for underwriting and origination mortgage fraud.

Since 2009, the U.S. attorney’s office has been investigating lending practices from Countrywide, which BofA acquired in 2008. The results of the investigation led to allegations that the bank created loans insured by the Federal Housing Authority (FHA) to unqualified home buyers. BofA was also accused of originating loans based on inflated appraisals and failing to identify homeowners who could participate in the government’s Home Affordable Modification Program.

Of the $1 billion, $500 million will provide recovery to the FHA, which was said to have incurred hundreds of millions of dollars in damages due to loan origination practices from Countrywide. The remaining $500 million will fund a modification program for affected Countrywide borrowers with underwater mortgages. BofA is required to solicit potential borrowers who are eligible for the program.