FHA Replenishes Fund, Expects to Meet 2% Reserve Mandate by 2015

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This is good news for both the FHA and Taxpayers. The FHA can reach is mandated reserves I the Taxpayers won’t have to shell out any more money for the banks screw-ups. For a more detailed look at this subject – please read the article below.

The FHA Condos Approval Company, Inc.

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More than a year after reporting a shortfall of $16.3 billion in the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance (MMI) fund, HUD announced significant improvements in the agency’s financial situation—though the fund remains in the red.

An actuarial report released Friday shows FHA’s insurance fund for single-family home loans has regained $15 billion dollars in value over the last year, bringing it to -$1.3 billion dollars and a capital ratio of -0.11 percent. By law, the federal insurer is supposed to maintain a capital reserve ratio of 2 percent, a goal it expects to meet in 2015.

As of now, the agency maintains more than $48 billion in liquid assets to pay expected claims.

“What is clear from the independent actuarial report is that the aggressive steps we have taken have made FHA stronger and put it on a sustainable path to fulfill its dual mission of supporting access to homeownership for underserved and low-wealth borrowers as well as supporting and stabilizing the housing market,” said HUD Secretary Shaun Donovan.

“We look to the future and remain committed to continuing our progress to strengthen the MMI Fund so that ladders of opportunity are available to all Americans for generations to come,” he added.

The actuarial report points to a number of factors driving the improvement in FHA’s finances, including declines in early payment defaults—to their lowest levels in seven years, thanks to improved underwriting in more recent books of business—and drops in serious delinquency and foreclosure rates as a result of enhanced loss mitigation efforts.

To read the complete article – please use the link below.

FHA Replenishes Fund

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