FHA Cushion Still Low
The Federal Housing Administration won’t need help from taxpayers even though their cash reserves are still below the level required by law, federal officials said Monday.

As of Sept. 30, the agency’s reserves were estimated to be at $4.7 billion, up from $3.6 billion a year ago. This is a 0.5 percent margin, significantly below the 2 percent the law requires, but federal officials don’t think it is a problem because it is the result of the FHA insuring more loans.

According to a report to be submitted to Congress on Tuesday, FHA has tightened its regulations and expects that its margins will be above 2 percent by 2015.

Source: Washington Post, Dina ElBoghdady (11/16/2010)