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On November 15, 2016, the Federal Housing Administration (FHA) released its Annual Report to Congress and the FY2016 Actuarial Review of the Mutual Mortgage Insurance Fund Forward Loans. The review shows that the Fund's capital reserve ratio has reached 2.32 percent and has improved by $43.9 billion since FY 2012. This is the second year in a row that the Fund exceeded the statutory requirement to maintain at least a 2 percent capital ratio. For forward mortgages the ratio was a healthy 3.28 percent, showing steady growth. For HECMs the ratio was a negative 6.90 percent, reflecting the volatility that has accompanied the HECM portfolio for the past five years. Serious delinquency rates for the active portfolio are at a ten-year low.
2017 NAR President William E. Brown issued the following statement on behalf of NAR:
"FHA's actuarial report shows that the fund has indisputably found its footing," said NAR President William E. Brown, a REALTOR® from Alamo, California and founder of Investment Properties. "That's good news for taxpayers, and a reflection of FHA's sound stewardship. It's clear from this report that FHA can continue taking responsible steps to manage their risk even as they take action to make homeownership more affordable for lower- and middle-income buyers."
"FHA mortgages are an important option for buyers, but high premiums and lifetime insurance requirements can take that option right off the table," Brown said. "By lowering premiums and eliminating life of loan mortgage insurance, FHA can expand on their work to serve a broad population of homebuyers. We look forward to working with them in the months ahead to bring these changes to light."