FHA's MMIF Capital Reserves Climb in Fiscal 2020

Housing Finance
The Federal Housing Administration (FHA) today released its annual report to Congress that shows the agency's capital reserve ratio of its Mutual Mortgage Insurance Fund (MMI Fund) ended the fiscal year at 6.10% — an increase of 1.26 percentage points over fiscal 2019. This is well above the congressionally mandated 2.0% capital ratio. "In a year like no other in recent memory, the Trump administration's extraordinary response to COVID-19 paved the way for FHA to play a leading role in helping struggling families and the nation’s housing market in FY 2020," said HUD Secretary Ben Carson. "While we focused our efforts on helping FHA home owners impacted by the global pandemic keep their homes, we balanced this with sound risk management to protect taxpayers," said Assistant Secretary for Housing and Federal Housing Commissioner Dana Wade. Key highlights from FHA's Fiscal Year 2020 MMI Fund Annual Report:
  • As of Sept. 30, 2020, FHA had active insurance on more than 8.3 million single-family forward and reverse mortgages, with a total unpaid principal balance of more than $1.29 trillion. FHA market share decreased from 11.56% in fiscal 2019 to 9.61% in fiscal 2020.
  • The share of first-time home buyers using FHA insurance reached a new high of 83.1% of total FHA forward mortgage purchase endorsements in fiscal 2020. Similarly, the share of mortgages insured by FHA to minority borrowers reached almost 33% of all FHA forward mortgage insurance endorsements in fiscal 2020.
  • FHA's forward mortgage portfolio achieved solid performance with a stand-alone capital ratio of 6.31% as of Sept. 30.
  • While improved compared to last year, the Home Equity Conversion Mortgage (HECM) reverse mortgage portfolio had a negative 0.78% capital ratio as of Sept. 30.
  • The forward mortgage portfolio continues to support the negative financial performance of the HECM portfolio. The HECM portfolio's future financial performance is highly sensitive to changes in home price appreciation and other economic factors.
Read HUD's press release. For more information, contact Curtis Milton at 800-368-5242 x8597.  

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