WASHINGTON, Nov. 15, 2016 /PRNewswire/ -- The Federal Housing Administration's just released actuarial report shows that the Mutual Mortgage Insurance Fund is on a steady financial trajectory, a finding the National Association of Realtors ® believes is an opportunity to make FHA's low-down-payment mortgage option available to an even broader swath of borrowers.
"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's MMIF is responsible for paying lenders if a mortgagor defaults. In a sign of continuing health, the report shows that the fund's "seriously delinquent" rate is at a ten-year low, while the overall economic value of the fund has increased by $3.8 billion. Last year the MMIF also achieved a 2 percent capital reserve ratio for the first time since the Great Recession. This marked an important benchmark showing that the fund had strongly rebounded, a finding reinforced by the 2.3 percent capital reserve ratio FHA reported today. FHA also reported a 3.2 percent reserve ratio for the "forward" program, which encompasses FHA's non-Home Equity Conversion Mortgage portfolio. NAR believes that the report would have appeared even stronger if not for weaknesses in the HECM program. In light of the MMIF's increasingly good health, NAR is encouraging FHA to reduce mortgage insurance premiums to better reflect the risk in the marketplace and fulfill its mission of serving low- and moderate-income borrowers.