HUD: FHA Mutual Mortgage Insurance Fund Programs on Track; No Plans to Change Premiums

HUD released its quarterly report to Congress on the FHA Single-Family Mutual Mortgage Insurance Fund Programs. The report said the MMIF stands at more than $80 billion and remains well above the 2% minimum capital reserve required by Congress.

“The health of FHA’s Mutual Mortgage Insurance Fund has remained resilient despite the financial challenges faced by homeowners with FHA-insured mortgages in 2020,” said HUD Secretary Marcia Fudge. “Through the pandemic, the FHA portfolio has experienced increased levels of seriously delinquent loans and a heightened level of loans in forbearance. We continue to monitor mortgage performance trends within our portfolio, particularly related to those homeowners who are struggling financially because of the pandemic.”

Fudge noted FHA took policy steps in February to assist homeowners by extending foreclosure and eviction moratoria through June 30; streamlining COVID-19 loss mitigation options; and allowing longer forbearance for borrowers whose plans were expiring. She said the American Rescue Plan recently signed into law by President Biden includes resources for housing, including nearly $10 billion Homeowner Assistance Fund, to help homeowners behind on their mortgage and utility payments and avoid foreclosure and eviction. “The actions we are taking now will help position the FHA program to continue to fulfill its critical mission in the future,” she said.

Fudge added given the current FHA delinquency crisis and our duty to manage risks and the overall health of the fund, “we have no near-term plans to change FHA’s mortgage insurance premium pricing. We will continue to rigorously evaluate our strategy and work transparently with Congress. Our number one priority is helping families keep their homes and remain safe as we work toward an equitable recovery.”

In response, Mortgage Bankers Association President & CEO Robert Broeksmit, CMB, issued the following statement:

“MBA commends Secretary Fudge for maintaining FHA’s current mortgage insurance premium pricing until we have a clearer picture of the long-term impact of the pandemic on FHA borrowers and the insurance fund. While it is desirable to have lower mortgage financing costs, particularly as rates rise and home prices continue to increase, we agree with HUD that we need more data about how the more than 1 million FHA loans that are delinquent perform as they exit COVID-19-related forbearance. We look forward to continuing to work with Secretary Fudge on ways to protect FHA borrowers and ensure the overall stability of the FHA program.”