Washington, D.C. — Today, the Federal Housing Administration, or FHA, released its annual report to Congress, which showed a slightly negative 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:
Today, we learned that the Federal Housing Administration’s comprehensive approach to restore its financial stability is working.
FHA has played a crucial role in supporting our economic recovery, preventing not only more catastrophic home-price declines but also a double-dip recession. While this support came at a cost to the agency’s capital ratio, a combination of strong management and improvement in the housing market has put the agency on track to fully replenish its reserves by 2015, two years earlier than previously predicted.
As Congress considers FHA reform, we think it’s important to note that FHA has performed exactly its intended role in providing access to credit throughout economic cycles. Any reforms should strengthen FHA and its ability to serve America’s families rather than gut the agency.
Going forward, we encourage FHA to continue striking the right balance between improving its financial position and ensuring broad credit access for qualified borrowers.
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