FHA mortgage Insurance Reserves To Fall Below 2% Rule

The Federal Housing Administration, the government agency that insures more than 20 percent of U.S. single-family mortgages, said its reserves will fall below congressional requirements as home prices decline. The FHA isn't in danger of failing, and the mortgage insurance fund will likely recover on its own within two years without any policy changes, Commissioner David H. Stevens said today. FHA is required by Congress to maintain a loan reserve ratio of at least 2 percent.

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