Chairman Hensarling Statement on FHA Capital Standards


WASHINGTON, D.C. – November 18, 2014 – (RealEstateRama) — House Financial Services Committee Chairman Jeb Hensarling (R-TX) released the following statement regarding the Federal Housing Administration’s (FHA) failure to once again meet its capital ratio requirement.

“A year ago the FHA received its first-ever taxpayer-funded bailout and 12 months later the FHA has once again failed to meet its legally required minimum capital ratio. It’s been six years since the FHA was in compliance with the law. The Obama administration predicts it will finally meet this requirement by 2016, but we’ve heard similar rosy predictions about FHA finances for years. Some in Washington are now clamoring for the FHA to lower its annual mortgage insurance premiums. But until the FHA fulfills its statutory requirement, that should be a non-starter.

“Last year’s $1.7 billion taxpayer-funded bailout and FHA’s continued failure to meet its minimum capital ratio reinforce everything that many have said about FHA for some time – that it poses a high risk to taxpayers if it is not fundamentally reformed. The American people clearly want to end the destructive cycle of boom, bust and bailout that Washington policies helped foster in the housing market. Regrettably the FHA, as it operates today, exacerbates taxpayers’ fears of future bail-outs. The FHA has gone from backstopping the market to supplanting the market without a clear policy mission to serve first-time and low-income borrowers. The time for FHA reform is now. We can truly wait no longer.”

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