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Strategic Objective
Continue to strengthen the Federal Housing Administration’s financial health, while supporting the housing market recovery and access to mortgage financing.
Strategic Objective
Overview
A strong Federal Housing Administration (FHA) is critical to the recovery of the housing market and our economy at large. The mortgage insurance provided by FHA has made financing available to individuals and families not adequately served by the conventional private mortgage market. The Mutual Mortgage Insurance Fund (MMIF) is the largest fund covering activities of FHA. The recession put substantial strain on the MMIF as private capital retreated and FHA played a counter-cyclical role to support the broader housing market. Over time, FHA has experienced significant swings in its market share as it has stepped in to provide insured loans for qualified borrowers who would otherwise be shut out of the mortgage market.
In addition, the severe decline in house prices, the sluggish performance of the economy, and the behavior of some lending partners resulted in increased FHA losses that drove its capital reserve ratio below the congressionally-mandated two percent level.
Read Less...Progress Update
HUD is designating the FHA financial health objective as making noteworthy progress. HUD continues to make progress restoring the financial health of the FHA Mutual Mortgage Insurance Fund (MMIF). During FY 2015, FHA’s capital reserve ratio climbed above the congressionally-mandated level of two percent for the first time since 2008, reaching 2.07 percent. In FY 2016, HUD will continue to monitor the health of the MMIF and, in particular, the impact of HECM volatility.
