FHA Chief Golding Defends Agency’s Health to Congress

The Federal Housing Administration (FHA)’s Mutual Mortgage Insurance (MMI) Fund, Home Equity Conversion Mortgage (HECM) program, and the Agency’s mission were the focal points in Principal Deputy Assistant Secretary Edward Golding’s testimony before the House Subcommittee on Housing and Insurance on Thursday.

The hearing, titled “The Future of Housing in America: Examining the Health of the Federal Housing Administration,” was the sixth on the topic in the House Subcommittee on Housing and Industry during the 114th Congress.

The capital ratio of the MMI Fund sat at 0.41 percent, less than a quarter of its 2 percent minimum required by Congress, for Fiscal Year 2014. For FY 2015, that number shot up to 2.07 percent, even after the FHA took some heat for lowering the MMI premium by 50 basis points in January 2015.

“FHA’s Mutual Mortgage Insurance Fund bore the strain of the Great Recession, falling below its required capital reserve and eventually taking a mandatory appropriation in 2013,” Golding said in his testimony on Thursday. “However, FHA’s focus on risk management, increasing revenue, and program improvements resulted in the ratio returning to 2 percent in 2015. This achievement was the result of FHA’s prudent policy changes, and an ability to work with Congress to pass stabilizing legislation and quickly implement program changes over the course of several years.”