The Biden Administration released a Fiscal Year 2022 proposed budget late last week that predicted strong economic numbers for the Home Equity Conversion Mortgage program during the next federal fiscal year that begins on October 1, 2021.
The budget projects the HECM program to operate at a credit subsidy level equal to negative 2.54 percent, which means it will generate substantially more receipts than it pays out in claims for that year’s book of business. Budget estimates also show HECMs made during the current federal fiscal year will perform at a negative credit subsidy rate of 2.34 percent.
The budgetary numbers are a further indication that FHA’s reforms over the past few years are having the desired impact.
Since the HECM program is self-sustaining and doesn’t require an annual appropriation from Congress, the President’s budgets provide a valuable bellwether on future HECM performance.
In addition to the HECM performance indicators, the President’s proposed FY22 budget requested $61 million for housing counseling services, which represents a slight increase from the $54 million appropriated in 2020.