FHA Climbs Back, Posts Positive Balance
The Federal Housing Administration posted a $4.8B value for the fiscal year, enough to cover its $1.1T portfolio's projected losses and take it off the treasury department's aid. It was the FHA's first reported positive balance since 2012. Still, the government mortgage insurance fund did not meet a "cushion" (equal to 2% of value) that Congress requires of it and is not expected to for another two years.
Balance sheets improved after the FHA increased premiums and reduced loan losses. The improving fortunes could lead to easier access to credit for first-time and lower-income homebuyers who have recently been priced out of the market. The FHA was formed after the Great Depression to aid those types of homeowners. But for now the agency has not announced plans to scale back premiums or other fees.