NAR President Moe Veissi has made a forceful case before a key congressional committee to protect FHA from potentially destabilizing changes to the agency’s main insurance fund. Some lawmakers have been talking about curbing the agency as a step toward reducing the federal government’s role in home ownership and also to shore up its reserves.
The agency maintains two reserves for its housing insurance program. One requires reserves for 30 years against loan losses, and another is a smaller reserve above and beyond the main reserve. The smaller reserve has dropped below a statutory limit.
Testifying before the House Financial Services Committee, Veissi said the housing market is showing signs of recovery, including in some areas that were among the hardest hit in the downturn. Should Congress make changes to FHA now, he said, while it’s one of the main home mortgage vehicles for households, the recovery could very well be derailed, and, with it, the struggling broader economy.
“If you diminish America’s opportunity, in any capacity, especially today when we’re just beginning to remove ourselves from one of the most horrendous housing situations the country has ever seen, then you do that at the peril of destabilizing the recovery,” he said.