The House Financial Services Committee held the first in a series of hearings on the State of the FHA single-family mortgage insurance program. In November, an independent actuarial projected the economic value of the FHA fund to be negative $16.3 billion. FHA is not bankrupt, and has more than $30 billion to pay claims on losses, but Congress requires them to hold a full 30 years-worth of reserves, and FHA does not have that.
The first hearing focused on economists and academics, most of whom proposed dramatic changes to the FHA program - including increasing downpayments, reducing the guarantee, increasing premiums and increasing credit score requirements. NAR opposes significant changes that could disrupt housing markets, and instead urges lawmakers to use restraint and remember the important role FHA plays for American homeowners.
Additional hearings are planned for the coming weeks, and NAR will continue to work with Congress and the Administration on this important issue.