Volume of Reverse Mortgages Falls, Health of FHA Program Improves

Reverse mortgage volume might be falling, but the long term health of the Federal Housing Administration’s program is improving according to a new report.

During the Q3 of fiscal year 2012, the number of FHA-insured reverse mortgages fell by 5%, with 14,204 units being endorsed. Despite fewer loans, the current years book of business is expected to perform the best since the housing downturn in 2007.

During fiscal year 2011, the HECM program’s subsidy rate hovered just below 0% for the entire year, meaning it was was estimated to generate just enough net present cash value over the life of the loans. During FY 2012, the book of business is expected to perform at a -1.52 subsidy rate, significantly better than years past.

The agency has made several changes to the program over the last few years, which include lowering the amount of money available to borrowers two separate times and increasing the insurance premiums charged to borrowers.


In the fall, the agency will release a report produced by independent auditors on the strength of the single-family insurance fund, which has been teetering on the need of a bailout from Congress the last few years.

View the report here.

Leave a Reply

Your email address will not be published. Required fields are marked *

Most Popular Articles

3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please