Washington, D.C. — Today, the Federal Housing Administration, or FHA, released its yearly actuarial reports and report to Congress, which showed a positive capital ratio in its main insurance fund. Julia Gordon, Director of Housing Finance and Policy at the Center for American Progress, released the following statement:
It is extremely welcome news that the Federal Housing Administration is back in the black. The agency has played a crucial role in supporting our economic recovery, preventing not only even more catastrophic home price declines, but also a double-dip recession. This support came at a cost to FHA’s capital ratio. Despite a decline in loan volume across the mortgage market that limited FHA’s revenue, the agency has grown its reserves by nearly $6 billion since last year, which puts the agency on track to fully replenish its reserves by 2016.
Going forward, FHA should continue to calibrate the balance between improving its financial position and serving families and neighborhoods. Specifically, it should re-examine the pricing of insurance premiums, which may have contributed to the decline in loan volume this year, as well as ensure that sales of distressed FHA loans provide maximum support to communities.
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