FHA is back in the black, but don’t hold your breath for premium rollbacks

NAR, industry groups say it's time to give homebuyers some relief

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The Federal Housing Administration's mutual mortgage insurance fund is unlikely to need another taxpayer bailout, but that doesn't mean homebuyers looking to finance purchases with an FHA-backed home loan will get a break on their premiums anytime soon. To make up for a massive uptick in claims, the Department of Housing and Urban Development (HUD) hiked FHA mortgage insurance premiums six times during the the housing bust, bolstering the insurance fund's capital position by more than $23 billion. While real estate industry groups complained that the premium hikes were painful to homebuyers who depend on FHA-backed loans with low down payment requirements, the premium hikes still weren't enough to maintain a 2 percent cash cushion for the insurance fund stipulated by Congress. For the first time in its nearly 100-year history, shortfalls in the insurance fund last year forced FHA to request a $1.7 billion infusion from the Treasury Department. Now, with HUD's annual report to ...