MBA Advocacy Update: MBA Calls for FHA MIP Cut Following Strong Annual Performance; GOP Holds House Majority
FHA Actuarial Report Shows Strong Performance; MBA Advocates for MIP Cut
On Friday, the Department of Housing and Urban Development (HUD) released its Annual Report to Congress on the financial status of the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance Fund (MMI Fund). The report announced a strong combined capital ratio of 11.47% – a slight increase from the 10.51% level in 2023 and well above the statutory minimum of 2.0%.
What they’re saying: MBA’s President and CEO Bob Broeksmit, CMB, in a press statement said, “Quality underwriting and effective risk management and loss mitigation efforts by HUD, FHA lenders, and mortgage servicers continue to support a healthy FHA program that has a high capital reserve ratio and low delinquency levels.”
Broeksmit added, “At 11.4%, the Mutual Mortgage Insurance Fund is more than five times the statutory minimum reserve ratio. While it is sensible to have a healthy cushion above the 2% minimum reserve, qualified borrowers should not be charged higher mortgage insurance premiums (MIP) than necessary.
“In addition to pursuing more program enhancements to boost housing supply and affordability, such as this year’s 203(k) program updates, borrowers would see meaningful payment relief from FHA eliminating its life of loan premium requirement and making another reasonable cut to the MIP.”
Why it matters: A healthy FHA program is necessary to ensure the broad availability of sustainable mortgage credit to low- and moderate-income households, minority borrowers, first-time homebuyers, and other historically underserved communities. The strength of this year’s annual assessment of the health of the MMI Fund provides an opportunity for HUD to consider further changes to the level and structure of FHA premiums to reduce costs to borrowers while maintaining strong reserves above the minimum.
What’s next: MBA will work with HUD – and the incoming Trump administration – as they evaluate any potential changes to FHA pricing and will continue to advocate for other program updates that boost supply and improve affordability.
For more information, please contact Darnell Peterson at (202) 557-2922.
It’s Official: Republicans Retain House Majority
Following the decisive election results, Donald Trump will return to the White House as the 47th President of the United States after exceeding his 2020 popular vote and Electoral College tallies, including sweeping all seven battleground states.
Republicans are set to control the Senate with at least a 53-seat majority, pending finalized results in Pennsylvania.
The final tally in the House of Representatives is still up in the air following both Democratic and Republican seat “flips” in various individual districts, but Republicans will keep their majority with a very likely narrow governing margin (depending on outcomes in several Western states).
Why it matters: A Trump administration and Republican control of both chambers of Congress could lead to sweeping attempts at changes to regulatory and legislative policy in 2025 and beyond, from tax reform, increased interest in GSE reform, and new leadership at HUD, the Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), and Treasury, among other key considerations.
What’s next: MBA will provide a deeper analysis in the near future on the full outcome of the national election – and what it means for real estate finance.
In the meantime, register for the next Mortgage Action Alliance (MAA) Quarterly Webinar: Post-Election Briefing on Wednesday, December 4, from 3:00pm – 4:00pm ET. You’ll hear from a panel of experts as they reflect on the outcome of the election and how to prepare for what’s ahead next year for our industry on the policy front.
For more information, please contact Bill Killmer at (202) 557-2736 and Pete Mills at (202) 557-2878.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
Transition Climate Risks: From Initial Assessment to Mitigation – November 20
Powering CRE Lending & Asset Management with GenAI: Practical Applications – November 21
High Performance Negotiations – Lessons and Strategies – December 17
Fundamentals of Commercial Insurance Issues and Problems – January 28
Navigating and Ensuring Accurate Reporting with the MBA Commercial and Multifamily Inspection Form – January 30
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin or (202) 557-2931.
