UPDATE 1-FHA Strong Enough To Play Key Role in Down Mkt-HUD

The Federal Housing Administration has taken sufficient steps to shore up its balance sheet to play a key role in funding home purchases where the private mortgage market has fallen short, Housing and Urban Development Secretary Shaun Donovan said on Tuesday. "FHA has taken the kinds of steps necessary to make sure that it will remain strong and healthy enough to continue to fulfill its mission of serving the underserved and playing a vital counter-cyclical role in the housing market," Donovan pledged in prepared testimony on the agency's budget to lawmakers on Capitol Hill.

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