On November 15, 2017, the Federal Housing Administration (FHA) released its Annual Report to Congress and the FY 2017 Actuarial Review of the Mutual Mortgage Insurance Fund. The report shows that for forward mortgages the capital reserve ratio was a healthy 3.33 percent, up from 3.11 percent for FY 2016. Serious delinquency rates continue to decline, dropping from a rate of 4.92 percent for FY 2016 to 4.32 percent for FY 2017. The total capital reserves for FY 2017 are $25.6 billion.
This is the third year in a row that the Fund exceeded the statutory requirement to maintain at least a 2 percent capital reserve ratio. The Fund's capital reserve ratio was 2.09 percent, down from 2.35 percent for FY 2016, due to the extremely poor performance of the Home Equity Conversion Mortgage (HECM) program. The FY 2017 HECM ratio was a negative 19.84 percent, demonstrating an increase in volatility from FY 2016 when the ratio was a negative 11.81 percent.
2018 NAR President Elizabeth Mendenhall issued the following statement on behalf of NAR:
“FHA’s mutual mortgage insurance fund once again exceeded its target of a 2 percent capital reserve ratio, but that only tells a part of the story. The forward program has a 3.33 percent capital reserve ratio, which HUD admits is well beyond what Congress requires. Realtors® are excited to see rising numbers of first-time, lower-income and minority homebuyers accessing FHA programs while the forward fund continues to strengthen. We believe the numbers still point to a healthy program that can do more to help homebuyers enter the market.”