FHA Plays a Vital Role in Home Financing

Washington, November 12, 2009

The following is a statement by National Association of Realtors® President Charles McMillan:

“The Federal Housing Administration is an essential tool for consumers and for the continued recovery of the housing sector. While the FHA is facing challenges brought on by instability in the financial sector and mortgage marketplace, the agency, led by FHA Commissioner David H. Stevens, is taking strong and proactive steps to ensure the safety and soundness of the Mutual Mortgage Insurance Fund.

“Improvements already underway include changing credit policies to enhance risk management; hiring a chief risk officer for the first time in its history; making lenders ensure that mortgages are properly underwritten; and modifying appraisal requirements including emphasizing appraiser independence and geographic competence.

“Of course, more improvements are needed, but FHA has been serving borrowers for 75 years with no taxpayer support. Home buyers should know their loans are secure.

“Housing is central to the economic recovery and has pulled this nation out of every economic downturn in history. FHA is facilitating that recovery—FHA’s increase in the mortgage market share has shot up from 4 percent several years ago to more than 25 percent today, and almost 80 percent of FHA loans are made to first-time homeowners. The agency’s role is supporting the market and the return to private capital.

“The National Association of Realtors® has long supported FHA’s mission to assist lower- and middle-income buyers in achieving the American Dream, and the agency’s pursuit of sound lending principles.”

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

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