In its FY2019 Q3 report to Congress on the financial state of the Mutual Mortgage Insurance Fund, the Department of Housing and Urban Development reported credit subsidy rates of -3.20 percent and -0.15 percent for forward mortgages and HECMs, respectively.
Mortgages with negative credit subsidies are forecasted to produce cash receipts for the federal budget, rather than generate losses.
The quarterly report covers mortgages insured by the FHA from April 1, 2019 through June 30, 2019.
While the report doesn’t provide any further details on the improving health of the HECM program, FHA recently noted in Mortgagee Letter 2019-16 – which extended second appraisal requirements indefinitely – that Collateral Risk Assessment was “having the desired effect of mitigating significant collateral valuation risks posed to the Mutual Mortgage Insurance Fund (MMIF) and borrowers.” Read the full report.