Flush with Capital, FHA Resists Call to Cut Insurance Premiums
November 15, 2021
A key indicator of the finances of the Federal Housing Administration reached a new high for the fiscal year ending Sept. 30, thanks to strong home price appreciation in spite of the ongoing COVID-19 pandemic.
But despite a 14-year high of 8.03% for the capital ratio of the agency’s mutual mortgage insurance fund — stoked by the recovery of the reverse mortgage program — the FHA did not signal immediate plans in its annual actuarial report to cut insurance premiums. The FHA is taking a “cautionary approach” to pricing in light of delinquencies and uncertainty about loans in forbearance, officials said.
“The effects of the pandemic on the FHA Single Family insurance portfolio continues to unfold, with over 660,000 loans that remain delinquent,” Marcia Fudge, secretary of the Department of Housing and Urban Development, said in a foreword for the report.
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