The U.S. Department of Housing and Urban Development has released its annual report showing healthy growth over this last year. For the second year in a row, the Mutual Mortgage Insurance (MMI) Fund is over the benchmark 2 percent. The capital ratio grew by $3.8 billion and is now at 2.32 percent. This is the fourth consecutive year of growth for the MMI Fund, according to the press release.
Other highlights of the report include:
- Fiscal year 2016 saw 1,258,063 mortgages endorsed by the FHA with an average loan size of $195,145.
- Significant improvements to foreclosure prevention policies, allowing more alternatives to borrowers.
- The forward portfolio has more than doubled in the last year, from $17 billion to $35.3 billion.
HUD Secretary Julian Castro said of the findings, “Today’s report once again confirms that our steps to maintain a financially sound Fund are paying off, giving more American families the opportunity to afford a home of their own.”
Will this mean a premium decrease in the coming year? Not likely, according to an article in HousingWire. Ed Golding, HUD’s principal deputy assistant secretary for housing said the FHA is not considering cutting mortgage premiums. Some organizations disagree with this stance and are calling for a reduction in the mortgage insurance premium and elimination of life of loan coverage, while others are cautioning on moving too quickly with a premium cut due to the volatility of the HECM portfolio. Whether or not the Trump administration will consider a cut is currently unknown.