HUD Will Ask Congress to Raise Cap on Insurance Premiums for FHA Loans

The Wall Street Journal is reporting that the Federal Housing Administration plans to announce measures it is considering to protect its dwindling reserves.

According to the WSJ:

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, plans to ask Congress on Wednesday to raise the cap on the annual insurance premium that the FHA can charge borrowers. In testimony before a congressional panel, he will also outline steps the agency is considering to set minimum credit scores, to require home buyers to put more money down, and to make lenders more accountable for loans that the agency insures.

In an interview on Monday, the FHA’s commissioner David Stevens told the WSJ that “We have to replenish the reserves and we have to be prepared for a market outcome that may not be as favorable”.

Nothing in the article states that the agency plans on raising any premiums for FHA’s reverse mortgage product.

Update: HUD published the Testimony of Secretary Shaun Donovan Hearing before the House Committee on Financial Services

FHA Considers Ways to Boost Its Reserves

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