In its quarterly report to Congress on the status of the Mutual Mortgage Insurance Fund, the Federal Housing Administration forecasted Home Equity Conversion Mortgages endorsed this year to perform at a negative credit subsidy rate of -02.39 percent over the loans’ projected lifespan.
This means the FY21 book will generate positive cash flows for the Mutual Mortgage Insurance Fund and is a further indication that FHA’s reforms over the past few years are having the desired impact
In announcing the quarterly report, Secretary of Housing and Urban Development Marcia Fudge said the health of FHA’s MMI Fund has remained resilient despite the financial challenges faced by homeowners with FHA-insured mortgages in 2020.
“The fund stands at more than $80 billion and remains well above the 2 percent minimum capital reserve required,” said Secretary 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.” Read the full report.