FHA’s MMI Fund Capital Ratio Remained Solid in Fiscal Year 2025
The Federal Housing Administration (FHA) has 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 (Sept. 30, 2025) at 11.47%, unchanged from the capital ratio for fiscal year 2024.
The 11.47% figure is well above the congressionally mandated 2% capital ratio and the highest level recorded since the MMI Fund ratio was first required by Congress in 1990.
Although the capital ratio remained stable and unchanged over the past year, the breakdown between forward and Home Equity Conversion Mortgage (HECM) cash flows shifted. Specifically, forward cash flows improved slightly and HECM cash flows declined slightly year over year.
In fiscal year 2025, FHA fulfilled its ongoing responsibilities by insuring more than 876,000 single-family home mortgages, and 83% of FHA purchase mortgages went to first-time home buyers. FHA also maintained its support for seniors through more than 28,000 HECMs, which is the only reverse mortgage product insured by the FHA.
The total capital in the MMI Fund reached $188.87 billion by the end of the fiscal year, an increase of $16.11 billion from fiscal year 2024. This reflects strong, responsible management of FHA’s portfolio.
Over the course of the last fiscal year, FHA has taken steps to strengthen the MMI Fund by implementing key policy reforms, including:
- Rescinding unnecessary and burdensome origination requirements,
- Restoring common sense safeguards for loss mitigation,
- Putting U.S. citizens first, and
- Working to remedy an emerging trend in risk layered loans.