Skip to main content

Mortgage Financing: Financial Health of FHA's Home Mortgage Insurance Program Has Improved

T-RCED-94-255 Published: Jun 30, 1994. Publicly Released: Jun 30, 1994.
Jump To:
Skip to Highlights

Highlights

GAO discussed the actuarial soundness of the Federal Housing Administration's (FHA) Mutual Mortgage Insurance Fund. GAO noted that: (1) the fund's economic value has improved significantly in recent years and the fund is accumulating sufficient capital reserves to become actuarially sound; (2) the fund's economic net worth was $600 million at the end of fiscal year (FY) 1992 and $4.9 billion at the end of FY 1993, which represents a capital ratio of 0.21 percent and 1.83 percent respectively; (3) the fund's financial health was primarily restored by favorable economic conditions in 1993, although legislative and program changes contributed to its improvement; (4) the fund did not surpass its 1992 mandate for capital reserves until the end of FY 1993, which was within 0.17 percent of its November 2000 target of 2.0 percent; (5) the fund's ability to achieve its reserve target by November 2000 and to maintain that ratio beyond that date depends on economic and program factors that affect its financial health; and (6) the GAO estimate of the fund's economic value is similar to the estimate prepared by an FHA contractor.

Full Report

Office of Public Affairs

Topics

Budgetary reservesFederal aid for housingFinancial analysisFinancial managementFunds managementHomeowners insuranceInternal controlsMortgage programsMortgage protection insuranceProjections