November 16, 2015

FHA capital reserves exceed target, no premium hike seen

The Federal Housing Administration on Monday announced its Mutual Mortgage Insurance Fund has exceeded its 2 percent statutory capital requirement for the first time since 2008, reaching 2.07 percent.

In a press call Monday, FHA's Principal Deputy Assistant Secretary Ed Golding said there were no plans to change the mortgage insurance premium or the mortgage insurance premium structure.

"FHA is on solid financial footing and positioned to continue playing its vital role in assisting future generations of homeowners," said HUD Secretary Julián Castro. "We've taken a number of steps to strengthen the Fund and increase credit access to responsible borrowers."

FHA benefited from a 0.5 percent reduction earlier this year on the premiums it charges for insuring home loans. The agency said the reduction "stimulated a 42 percent increase in total volume including a 27 percent increase in purchase-loan endorsements."

The economic value of the MMI Fund gained $19 billion in FY 2015.