FHA May Ask For $800 Million

e of falling home values, the Federal Housing Administration (FHA) plans to ask Congress for nearly $800 million in taxpayer money to buttress a mortgage program for seniors. FHA will ask Congress for the subsidy instead of raising its fees charged to senior borrowers, according to a [link=http://www.washingtonpost.com/wp-dyn/content/article/2009/05/07/AR2009050704253.html][u]Washington Post article[/u][/link]. The agency is required to maintain capital reserves equaling at least 2% of the value of outstanding mortgages, but according to a third-party audit performed last fall, FHA's fund – while still above the 2% mark – had dropped significantly. As of Sept. 30, the fund contained $12.9 billion, the Washington Post item notes. A year earlier, the fund stood at about 6.4%. ‘I feel comfortable that the likely outcome is that we remain above the two percent, but I don't think that is assured by any means at this point,’ says Housing & Urban Development Secretary Shaun Donovan, according to a [link=http://uk.reuters.com/article/marketsNewsUS/idUKN0751258920090507?pageNumber=2][u]Reuters report[/u][/link]. SOURCES: Washington Post,

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