Annual report to Congress highlights FHA’s leading role in supporting affordable home financing for first-time homebuyers and borrowers of color, providing assistance to struggling homeowners, and addressing housing supply and affordability.
WASHINGTON – RealEstateRama – The Federal Housing Administration (FHA) today released its Annual Report to Congress on the financial status of its Mutual Mortgage Insurance Fund (MMI Fund), which is used to operate FHA Single Family mortgage insurance programs, authorized under Title II of the National Housing Act. The report highlights FHA’s significant role in supporting affordable mortgage financing for first-time homebuyers and borrowers of color while continuing to assist homeowners affected by the COVID-19 pandemic to keep their homes. It also underscores FHA’s work to support increased housing supply and affordability while reducing barriers to fair and equitable homeownership.
FHA’s achievements in fiscal year 2022 are supported by a strong MMI Fund, as demonstrated by the Fund’s capital ratio of 11.11 percent as of September 30, 2022.
“I’m so proud of FHA’s work to make homeownership possible for our nation’s underserved households and communities,” said Federal Housing Commissioner Julia R. Gordon. “Behind the bottom-line numbers are some two million individuals and families who were able to achieve homeownership or stay in their homes through hard times thanks to assistance from FHA.”
As the report notes, FHA helped more than one million homeowners who were behind on their mortgage payments to obtain an FHA COVID-19 Forbearance and/or an FHA COVID-19 Recovery option to stay in their homes despite the dislocations caused by the pandemic. In FY 2022, FHA reduced the number of serious delinquencies – mortgages 90 or more days past due – by almost half, ending with a serious delinquency rate of 4.77 percent on September 30, 2022. This number had reached more than 11 percent during the height of the COVID-19 crisis.
In addition to its focus on helping homeowners recover from the financial effects of the pandemic, the report speaks to FHA’s work throughout the past fiscal year to reduce barriers to homeownership and increase housing supply and affordability. New policies include allowing the use of positive rental history as a factor in FHA first-time homebuyer mortgage underwriting assessments; revised guidance for calculating effective income for borrowers with employment gaps due to the pandemic; and program modifications to FHA’s property disposition programs to provide priority purchase opportunities for owner-occupant buyers.
Key Highlights from FHA’s Fiscal Year 2022 Mutual Mortgage Insurance Fund (MMI Fund) Annual Report
November 15, 2022
As in past years, in fiscal year 2022, FHA again led the industry in its support of first-time homeownership:
- The overwhelming majority of FHA insurance endorsements, some 84% of its total forward purchase mortgage endorsements (678,675 mortgages), were for mortgages made to first-time homebuyers in fiscal year 2022.
- The share of FHA’s fiscal year 2022 total purchase mortgage endorsements on mortgages for first-time homebuyers was 37 percentage points higher than that of other participants in the U.S. housing market.
Supporting homeownership for communities of color is a core element of FHA’s mission and a significant part of FHA’s business:
- In fiscal year 2022, FHA provided an insurance endorsement on mortgages for 284,807 self-identified individuals and families of color, 29% of its total forward mortgage insurance endorsements.
- FHA served three times as many Black borrowers by share of its total forward mortgage insurance endorsements than the rest of the market, and two times as many Hispanic borrowers by share than the rest of the market, according to 2021 Home Mortgage Disclosure Act (HMDA) data, the latest such data available.
FHA’s ongoing focus on helping borrowers struggling financially because of COVID-19 yielded substantial results in fiscal year 2022:
- From the start of the pandemic through September 30, 2022, more than one million borrowers with FHA-insured mortgages took advantage of loss mitigation home retention options or were in the process of obtaining loss mitigation through their mortgage servicer.
- More than 566,000 homeowners received a COVID-19 Recovery Standalone Partial Claim through their mortgage servicer throughout fiscal year 2022. The Standalone Partial Claim allows borrowers to place missed mortgage payments in a no-interest subordinate lien that they do not need to repay until they sell the property or refinance their first mortgage.
- FHA’s other loss mitigation home retention options have helped almost 445,000 borrowers to regain their financial footing and avoid foreclosure over the course of fiscal year 2022.
- As of September 30, 2022, FHA’s serious delinquency rate, the percentage of mortgages 90 or more days delinquent, was 4.77%. This is a decrease of four percentage points in just one year and a reduction of more than seven percentage points from the peak of 11.90% experienced in November 2020.
The strong performance of the MMI Fund in fiscal year 2022 positions FHA well to pursue new opportunities through its programs:
- The overall Capital Ratio of the Fund increased by three percentage points over the previous fiscal year, ending at 11.11% as of September 30, 2022.
- FHA’s forward mortgage portfolio achieved a stand-alone capital ratio of 10.47% as of September 30, 2022, a 2.48 percentage point increase over fiscal year 2021.
- The FHA Home Equity Conversion Mortgage (HECM) portfolio’s stand-alone capital ratio stood at 22.77% as of September 30, 2022, a 16.69 percentage point increase from fiscal year 2021, due in part to the permanent allocation to the HECM portfolio of $1.7 billion in appropriated funds received by FHA in fiscal year 2013.
- The MMI Fund has $147.7 billion in MMI Capital, a $41.2 billion increase from fiscal year 2021.
The Annual Report to Congress Regarding the Financial Status of the Federal Housing Administration Mutual Mortgage Insurance Fund for Fiscal Year 2022, and the fiscal year 2022 actuarial reviews of the forward and Home Equity Conversion Mortgage portfolios are available on HUD.gov.